It is great that JP Morgan Chase has been sued–and congrats to NY Attorney General Eric Schneiderman. But, we’ve seen this picture before: suits are filed and the executives who committed fraud or financial crimes or misconduct are NEVER–NEVER–held accountable. If we want real change–not phony, uplifting change–these people must go to jail. NO DEALS.
Here is the upshot of the news:
The federal mortgage task force that was formed in January by the Justice Department filed its first complaint against a big bank on Monday, citing a broad pattern of misconduct in the packaging and sale of mortgage securities during the housing boom.The civil suit against Bear Stearns & Company, now a unit of JPMorgan Chase, was brought in New York State Supreme Court by Eric T. Schneiderman, the attorney general who is also a co-chairman of the task force, known as the Residential Mortgage-Backed Securities Working Group.
The problem is that this is not the news. The news is that bank executives still have their jobs and are still making huge pay AFTER they engaged, directly or through their subordinates, in illegal, criminal and improper misconduct.
Bank of America executives–who were central to deceiving investors–got a stay-out-of-jail card to the tune of a $2 billion settlement.
Barclays paid hundreds of millions of dollars in shareholder money to wipe away fraud charges–- and no executives went to jail.
Goldman Sachs execs were pleased to see a $550 million to pay offtheir criminal behavior–because they, too, stayed out of jail.
And, to top it off, the same JPMorgan now being sued has already shelled out $153 million, a bargain to make previous charges go away–without any jail time for executives.
Let’s underscore: this is shareholder money that pays off these fines. It does not come from the pockets of the CEOs and top executives.
And, when the banks suffer losses because of fraud or wrong-doing, who pays the price? The secretaries, the clerks and the low-level people who get shown the door when the pyramid crashes down.
The only lesson learned is this: we can do it again because we won’t pay a price for destroying peoples’ lives.
Until these guys sit in jail, nothing will change.