Sunday, July 17, 2011

Alleged Fraudsters “Agreed” to Fines: No Jail Time

Alleged Fraudsters “Agreed” to Fines: No Jail Time
By Stephen J. Gray

“We participated in things that were clearly wrong and we have reason to regret and we apologize for them,…” Lloyd Blankfein, Chairman and Chief Executive Officer of Goldman Sachs, quoted in Bloomberg News, November 18, 2009. [1]

Despite the alleged massive frauds perpetrated by financial scam artists in the sub-prime mortgage scandals none of the really big fish have gone to jail. The smell of corruption permeates the system, and yet the system appears to have accepted that some people are too big to fail or jail. An article in Bloomberg news of June 1, 2011, stated,
“ Goldman Sachs Group (GS) won’t face criminal prosecution related to sales of mortgage-linked securities because such a move could threaten the U.S. financial system, according to Brad Hintz, an analyst at Sanford C. Bernstein & Co.” [2]

Well excuse me, does this mean that the justice system hands down no jail time for the powerful but gives jail time to the powerless? The article went on to say: “In July, Goldman Sachs agreed to pay $550 million to settle a civil fraud suit by the U.S. Securities and Exchange Commission that alleged the firm misled clients about a mortgage-linked investment.”

Goldman Sachs is not the only financial firm that has plenty of money to pay a fine but does not do any hard time. Here is an excerpt from the San Francisco Chronicle of July 8, 2011:

“JPMorgan Chase & Co. has agreed to pay $228 million to settle federal charges that the bank conspired to rig the bidding on investment contracts sold to state and local governments to boost its profits at taxpayer expense.” [3] The article went on to say:

“The Justice Department and the SEC have been investigating for more than four years the ways that banks and financial advisers fixed the bidding on investments sold to municipalities. Prosecutors say the conspiracy cost taxpayers by allowing banks to pay governments below-market rates. JPMorgan's penalties are the largest yet to result from the investigation, which also led to settlements with UBS AG and Bank of America Corp.”

Well, isn’t it nice that these “respectable” bankers “agreed” to pay a fine? Did they also “agree” that jail time was not necessary in their cases? After all, if they were innocent of these charges, why would they have “agreed” to pay fines? But, they “agreed” to pay. What does that say about guilt?

I believe something is rotten in the halls of justice when the powerful can waltz away free after allegedly committing fraud. Many of these bankers and financiers were bailed out by taxpayers’ dollars. Many of them have subsidiaries in offshore tax havens, and some of these powerful bankers have been known to advise governments on monetary policy. Meanwhile, there are over 40 million Americans on food stamps and an article of January 19, 2011, at, headlined: “The More Americans that Go On Food Stamps The More Money JP Morgan Makes,” is well worth reading. [4]

A woman in Michigan has been threatened with jail time for planting a vegetable garden in her front yard. [5] Perhaps, she would be treated differently if she was a banker? Many people have lost their jobs and homes, their pension funds are in the dumpster and their taxes helped bail out the perpetrators of their predicaments. Yet, the predicaments of the perpetrators are washed clean by them agreeing to pay fines! Are these perpetrators getting special treatment? No jail time has been handed down, yet unimportant people have gone to jail for much less. If there was any justice in the system surely some of these pin striped suited bankers should be doing hard time? Instead some of these bankers and financiers are flying around free as vulture birds and feeding off the misery and despair they created.

Stephen J. Gray
July 17, 2011.