Legal News

Few Federal Indictments: A Hedge Fund Grows on Wall Street
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

As insider trading cases come to light, SAC Capital was indicted this week. In the aftermath of the 2008 financial crisis, there have been very few criminal prosecutions. A former federal prosecutor who also served as a special inspector general who oversaw the Troubled Asset Relief Program, Neil Barofsky, commented, “The folks responsible for this incredibly painful economic damage that struck our economy have gone free.” According to NPR.org, insider trading prosecutions have resulted in more than 70 convictions. Neil Barofsky commented, “This sends a very, very powerful message to the entire industry.”

William Black, a top lawyer for the Office of Thrift Supervision during the savings and loan debacle in the 1980s comments on why more bankers aren’t in jail. During the savings and loan crisis he noted that there were a thousand agents working on and auditing fraud cases. Yet when the financial crisis struck, there were only about 120 FBI agents working on bank fraud. He comments that these are tough cases for a jury to understand, with mortgage securitization and complex financial instruments. “It would be much more difficult than the insider trading cases.”

  
What
Where


Understanding the securitization and diversification of risk tranches of triple A, B, and C mortgage securities isn’t the worst of it. Really considering the derivatives and option pricing is likely to give any jury a headache. It is also hard to criminalize banks when the government bailed them out and wanted to save them. However, more oversight could have prevented insider trading form happening as it did with Rajaratnam, Rajat Gupta or SAC Capital.

Former federal prosecutor Barofsky comments, “I think that there was a tremendous amount of fraud.” Attorney William Black thinks it’s not too late to prosecute the firms in the financial industry that have been involved in this kind of securities fraud.

Jamie Dimon, CEO of JPMorgan Chase, told Jim Cramer of Mad Money on CNBC, “One of the great things about America is, failure is not illegal or wrong…you make investments. They don’t always pay off. It doesn’t mean you’re a criminal.”

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!






 

RELEVANT JOBS

Post-Conviction Resource Attorney

USA-CA-Los Angeles

POSITION: Post-Conviction Resource Attorney LOCATION: Hybrid work model; required travel to on-si...

Apply now

Litigation Attorney

USA-NJ-Morristown

Litigation associate sought in a busy medical malpractice firm in downtown Morristown.  Experie...

Apply now

Post-Conviction Coordinating Attorney

USA-CA-Los Angeles

POSITION: Post-Conviction Coordinating Attorney LOCATION: Hybrid work model; required travel to o...

Apply now

National and New York Commercial Title Insurance Underwriter

USA-NY-Westbury

  Job Description National and New York Commercial Title Insurance Underwriter Provide...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Venture Capital Attorney

USA-CA-San Diego

San Diego office of a BCG Attorney Search Top Ranked Law Firm seeks corporate business attorney with...

Apply Now

Real Estate Attorney

USA-CA-San Diego

San Diego office of a BCG Attorney Search Top Ranked Law Firm seeks transactional real estate attorn...

Apply Now

Experienced Health Care Attorney

USA-ME-Portland

Portland office of a BCG Attorney Search Top Ranked Law Firm is seeking health care attorney with 5-...

Apply Now

SEARCH IN ARCHIVE

To Top