Financial Crisis: Criminal Fraud or Greed and Stupidity?

by Derek Loosvelt | March 01, 2011

According to Fox Business News correspondent and New York Post columnist Charles Gasparino, for better or worse, no Wall Street executives belong behind bars in connection with their acts that led to the 2008 financial crisis. However, they do perhaps belong in detention for their stupidity, and may serve an eternity of intense heat for their greed.

Chuck believes that former New York Attorney General Eliot Spitzer (no patron saint for sinless living himself) is partially to blame for not nabbing any big swinging banking CEOs when he had the chance. Chuck says the former AG (and John) "brought some good cases, but all the ones against the big banks were civil, not criminal -- and he ultimately settled for headlines and a modest fine."

Chuck also believes that, anyway, "most of what went on in the buildup to the 2008 financial crisis wasn't criminal fraud as much as it was a collective bout of greed and stupidity -- aided and abetted by years of government rescues that gave big-firm CEOs every reason to believe there was no real downside risk."

Which means that those of you out there eagerly awaiting a juicy criminal trial with one of the major crooks of the crisis (such as Dick Fuld) as lead defendant might be waiting a hell of a long time.

Exhibit A, according to Chuck: "The SEC is under intense pressure to bring a case against someone at Lehman, whether it's Fuld or another top exec -- and having a tough time coming up with conclusive evidence they knew they were lying about what they were saying about Lehman's chances. And if they can't prove that, they don't have a fraud case."

Perhaps the only bit of comforting information Chuck can pass on to the vengeful among us is this: "If it's a crime to help trigger a disaster by getting things wrong, a lot of people belong in jail."

(NYPost)

(Related: "Inside Job" Director Calls Out Wall Street Execs During Oscar Acceptance Speech)

Filed Under: Finance


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