NY Times | As Wall St. Polices Itself, Prosecutors Use Softer Approach

In Shift, Prosecutors Are Lenient as Companies Break the Law

As the financial storm brewed in the summer of 2008 and institutions feared for their survival, a bit of good news bubbled through large banks and the law firms that defend them.

Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.

Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks. The Justice Department’s directive, involving a process known as deferred prosecutions, signaled “an important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors,” Sullivan & Cromwell, a prominent Wall Street law firm, told clients in a memo that September.

The guidelines left open a possibility other than guilty or not guilty, giving leniency often if companies investigated and reported their own wrongdoing. In return, the government could enter into agreements to delay or cancel the prosecution if the companies promised to change their behavior.

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  1. Jason Werner says:

    As the big OSU Buckeye fan that I am, I’d like to stick the NCAA on FDIC-member banks and prosecutors. And we can hire ESPN to obtain documents in discover, whereas they just sued OSU today for failure to disclose.

    Failure to disclose: Where have I heard that one before???????

    My Buckeyes are a bunch of frauds, not as bad though as my former colleagues and most FDIC-member banks even today, yet at least Buckeye Nation is very sorry for their civil (possible crimes), sad that the banks still give us the finger.

  2. Tim Bryant says:

    Bank of America Lawyer, Consultant Gave Foreclosure Probe Chief $15,000

    Iowa’s Democratic Attorney General Tom Miller is known for taking on big business. … Most recently, Miller took the lead on the investigation by all 50 state attorneys general into the “robo-signing” foreclosure scandal, where several big banks allegedly approved taking away people’s homes without adequately verifying the facts in court, as required by law in some states.

    Last fall, just after he made the announcement that he would look into the foreclosure mess, contributions to Miller’s campaign coffers for November’s election soared, thanks in large part to out-of-state lawyers who make a living representing big banks, a new report from the National Institute for Money in State Politics finds. “Nearly half of the money Miller raised in 2010,” NIMSP reports, “was donated after the October 13 announcement that he would be coordinating the 50-state attorneys general investigation.”

  3. Debbie says:

    How quick we are to prosecute the little guy….but the big guy…that’s another story. Is “Lady Justice” really blind?

  4. housemanrob says:

    Behavior change by sociopaths!……..what a joke……..like cutting children loose on free candy in a candy store!

  5. housemanrob says:

    I say…….DEFER THIS!!!!!

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