The DOJ issued new policies Wednesday that prioritize the prosecution of employees for financial crimes. As opposed to the current system, where corporations receive fines that only punish the shareholders.
But because it doesn’t change anything about the circumstances that make corporate employees so difficult to prosecute!
How can you prove, beyond reasonable doubt, that an individual bank executive was responsible for, say, selling misrepresented loans?
Senior bank executives probably didn’t sell any misrepresented loans. Low-level employees did. And what’s the point of punishing junior employees when the corporate culture is completely corrupt?
Right now prosecutors try to do the next best thing, which is to have the corporation promise certain reforms in exchange for deferred or non-prosecution.
I don’t believe much will change with this memo. Maybe more bank employees will be prosecuted, but the last thing I want is to put more people in jail. Sending nonviolent criminals to jail is a wasteful and ineffective form of punishment.
I would rather just see small businesses and non-white-collar offenders receive the same leniency afforded to large banks.
1. Justice Department Sets Sights on Wall Street Executives –NY Times
2. Rich People Don’t Go To Jail