It took 60 minutes (CBS) and Frontline (PBS) to publicly document what had been known to many inside the derivatives industry.
In 2008 derivatives crime that cost the US economy $12.8 trillion were not prosecuted. But worse yet, these crimes were not properly investigated, media reports show.
2008 led to further criminality, it can be argued. One can logically assume that HSBC executives might have thought differently about laundering money for drug cartels, Iran and terrorist groups if there was a realistic specter of criminal punishment. That’s deterrence not vengeance. More significantly, the apparent blatant criminality and brazen disrespect for regulatory authority might not have been on display in MF Global had deterrence been in place.
Documenting The Journalistic Tone
What’s fascinating is documenting the journalistic mood relative to what can only be described as criminality that has significantly damaged the world financial system.
At first journalists I follow appeared not to think deep seated, intentional criminality was at play. They assumed the crimes were complex and prosecution difficult. The mantra with MF Global, for instance, was: Prove the criminality and MF Global executives will be convicted.
Now that inside indications regarding rampant criminal behavior are slowly working their way into the media consciousnesses – and knowledge Department of Justice ignored hard criminal facts in 2008 — a different tone among some in the media appears to be taking shape.
Apologists for Big Bank Criminality Taking the Wrong Approach
Now that MF Global crime is more reticently clear, and DOJ’s apparent official policy for not investigating certain institutions and individuals, some in the media are changing their tune. However, while the majority seem to be open to discussing real issues and see the clear absurdity — if not constitutional crisis — caused by not investigating and prosecuting “untouchable” individuals, some cling to the past. Some have apparently defended Wall Street crime as part of the necessary price a society pays to promote big bank monopolistic dominance in financial services.
Take CNBC host and New York Times columnist Andrew Ross Sorkin. Mr. Sorkin is the respected author of Too Big to Fail, a book and later movie. Insiders note the story somehow did not get into some details regarding a highly suspicious transfer of assets from Bear Stearns to an unmentionable large bank counter party that surrounded the bankruptcy.
Fast forward as the public discussion of actually investigating financial criminal behavior heats up.
Speaking on MSNBC’s Now with Alex Wagner, Mr. Sorkin apparently hops on the big bank defense team. Note at 4 minutes in the interview how the clear topic was holding bank executives to criminal accountability, and Mr. Sorkin changed the topic to a defense of the Too Big To Fail guarantee — another topic where the truth has yet to see the light of day. The topic of discussion had been the lack of criminal prosecution, and Mr. Sorkin moves to what some might consider a threat: discussion of the need for the large banks in our economic system. It had nothing to do with the criminal topic at hand. Later at 7:50 of the interview, Mr. Sorkin again diverts the topic. He addresses the topic of “going after” JP Morgan. No one is saying JP Morgan needs to be held criminally accountable, but individual executives who violate the law can be strategically targeted without bringing down the institution.
Rules and laws have not changed. We will know if MF Global prosecution is serious if it focuses on the clear criminality and tells a simple story. The more complex the story told by DOJ regarding MF Global, the louder the signal that criminal actions are being allowed to damage the US financial system.
We are at a historic moment in time. A clear signal must be sent to a minority of Wall Street criminals. Let’s keep an eye on MF Global as it will be the tipping point towards Wall Street justice.
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