High-level bank executives are rarely prosecuted. What normally happens in the cases of Wall Street law-breaking is the bank admits no guilt, but agrees to pay a huge fine, which it can write off on its taxes.
According to Bloomberg News, James Kidney, a former trial attorney from the Securities and Exchange Commission (SEC), recently claimed his bosses were too “tentative and fearful” to prosecute Wall Street leaders.
“[The SEC] polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said during his farewell party in March. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”
Kidney claimed his bosses didn't want to go after Wall Street firms because they hoped to be hired by those same firms after leaving the SEC.
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Former Rolling Stone writer Matt Taibbi appeared on Democracy Now today to discuss his new book The Divide, which focuses on the vast differences of the justice system for wealthy banks and middle class folks (video below).
Taibbi explained how an African-American bus driver got arrested for "obstructing pedestrian traffic" for standing outside his New York home at 1 a.m. when there was no traffic.
"The idea is to [arrest] as many people as you can, see how many of them have guns or warrants and then throw back the innocent ones," said Taibbi. "But the problem is, they don't throw back everybody, they end up swooping up a lot of innocent people and charging them with really pointless crimes."
Taibbi contrasted that with bank executives who are not prosecuted because there are actual fears in the U.S. Justice Department that if bank executives go to jail, banks might fail, disrupt the economy and cause massive unemployment.
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Taibbi said this was a case of "too big to jail."