Monday, June 18, 2012

Wall Street Goes to Jail

In 2008, America found out the hard way that nobody had been minding the store on the subprime mortgage backed securities market.  As a direct result, millions of houses were foreclosed upon, millions of people lost their jobs, President Bush and Treasury Secretary Paulson gave Billions (with a "B") of taxpayer dollars to banks via the TARP in order to stave off another great depression, banks still stopped making loans, credit froze, the DOW plummeted, unemployment went up, and Wall Street executives still somehow managed to give each other record bonuses in the middle of all this.  America became extremely pissed off but the problem was so complex that nobody knew who to blame...except when it came to Wall Street.  No matter one's financial acumen, a consensus quickly developed among the common man that but for Wall Street taking risky bets with other people's money and other people's mortgages then none of this would have ever happened.

And so America gathered up the proverbial pitchforks and started demanding that heads be placed on spikes.  The general public first took out its frustration on Bernie Madoff (remember that guy?), a ponzie-schemer who had absolutely nothing to do with America's financial meltdown even though he had defrauded hundreds of families out of their life savings. He just so happened to pull his crap at the worst possible time; a time when America had all of a sudden developed a very low tolerance for any and all financial wrongdoing.  Once that subsided, America resumed its mission to punish all of those who had caused this great recession.  The general public expressed outrage at Wall Street bonuses and an entire anti-spending movement known as the Tea Party emerged seemingly overnight.  Everybody was angry.  Americans took to the streets as if they were hoping to catch millionaire CEO's in the process of skipping town in their White Broncos like OJ.  But nothing happened.  Wall Street CEO's did not try to flee the country.  And more importantly, none of them were arrested.  For anything.  Until recently...

Per NY Times:

Rajat K. Gupta, the retired head of the consulting firm McKinsey & Company and a former Goldman Sachs board member, was found guilty on Friday of conspiracy and securities fraud for leaking boardroom secrets to a billionaire hedge fund manager.
He is the most prominent corporate executive convicted in the government’s sweeping investigation into insider trading.
The case, which caps a wave of successful insider trading prosecutions over the last three years, is a significant victory for the government, which has penetrated some of Wall Street’s most vaunted hedge funds and reached into America’s most prestigious corporate boardrooms.
It also demonstrated that prosecutors could win an insider trading case largely built on circumstantial evidence like phone records and trading logs. Previous convictions, as in the trial of Raj Rajaratnam, the hedge fund manager on the receiving end of Mr. Gupta’s assumed tips, have relied more heavily on the use of incriminating wiretaps.
Mr. Gupta is one of the 66 Wall Street traders and corporate executives charged with insider trading crimes by Preet Bharara, the United States attorney in Manhattan, since 2009. Of those [66], 60 have either pleaded guilty or been found guilty. Juries have convicted all seven defendants who have gone to trial.

60 out of 66 Wall Streeters convicted???  7 for 7 on jury trials???  Talk about kicking ass and taking names.

[Editor's Note: The lead federal prosecutor responsible for all these slayings is a guy named Preet Bharara who was appointed by President Obama in 2009 to be the U.S. Attorney in Manhattan.  He's got a pretty impressive hit list so check out his bio if you have a minute.]

Although the fervor has somewhat died down, the convictions apparently have been going up on the Wall Street folks who helped cause the recession that we're going through now. 

1. Are we finally starting to see some retribution for the 2008 recession?
2. Is this too little too late?
3. Why is this not bigger news?
4. Is the prosecution of Wall Street folks anti-capitalism?
5. Should the people who caused the recession go to jail?
6. Would these people continue to be prosecuted under a Romney Presidency?
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