In a move that can only mean a presidential election campaign is upon us, the Justice Department said it is finally going to pursue individual white- collar criminals.
As the New York Times reported, the Justice Department “issued new policies on Wednesday that prioritize the prosecution of individual employees – not just their companies – and put pressure on corporations to turn over evidence against their executives.”
Pardon my cynicism, but after so much failure to prosecute, the onus is on the Justice Department to show that it’s serious by way of actions, not words.
After the most target-rich environment for white-collar prosecution ever, the nation’s top prosecutors have suddenly realized that “Hey, crimes! We should do something about that!” By what must be the sheerest of coincidences, almost all statute of limitations on the oodles of white-collar misdeeds committed during the financial crisis have expired.
As I observed several years ago, “The greatest triumph of the banking industry wasn’t ATMs or even depositing a check via the camera of your mobile phone. It was convincing Treasury and Justice Department officials that prosecuting bankers for their crimes would destabilize the global economy.”
The evidence of criminality was clear and overwhelming. But instead of prosecutions and trials, we watched as the Justice Department under former Attorney General Eric Holder decided that certain financial institutions were too big to jail, and that prosecuting senior executives would damage the financial system.
Too be fair, there is a new sheriff in town: Loretta Lynch seems to be departing from the course steered by her predecessor, now comfortably ensconced at Covington & Burling. That Washington-based law firm represents many white-collar criminals. The revolving door lives, as Holder and five of his deputies, including Lanny Breuer, former Southern District U.S. attorney, ended up there. Breuer’s responsibilities were supposed to include policing Wall Street. Now, he gets to defend anyone who faces the remote odds of being charged with wrongdoing.
Here we are seven years after the crisis, and only now is the Justice Department getting serious about prosecuting individuals? It’s almost enough to make one wonder if an election is coming up or something.
Barry Ritholtz is the founder of Ritholtz Wealth Management and former CEO of FusionIQ, a quantitative research firm.