TEXT OF STORY
STEVE CHIOTAKIS: There’s word this morning one Federal agency is investigating dozens of executives and employees at some of the banks that failed during the financial crisis. The Wall Street Journal reports the Federal Deposit Insurance Corporation could charge as many as 50 former bank execs.
Marketplace’s Stacey Vanek-Smith is with us live in New York to talk about it. Good morning Stacey.
STACEY VANEK-SMITH: Good morning, Steve.
CHIOTAKIS: Stacey, the FDIC is known mostly for insuring bank deposits. Why is it the agency leading this investigation?
VANEK-SMITH: Well, part of it is that the FDIC wants to get some of its money back. It’s lost more than $180 billion insuring depositor losses since the financial crisis began. And it actually could see some success. After the Savings and Loan crisis in the 80s, the FDIC collected about $4.5 billion from these kinds of claims against banks.
CHIOTAKIS: Now these are criminal investigations. What kind of crimes are we talking about, Stacey?
VANEK-SMITH: They’re looking at evidence of purposeful wrongdoing. More than 300 banks have failed since the financial crisis began and just a few of them are being investigated. I asked Georgetown law professor Don Langevort what kinds of crimes they’re investigating.
DON LANGEVORT: Lying to regulators, misappropriating assets, evidence that the bankers were lining their own pockets.
CHIOTAKIS: What about the timing of these probes?
VANEK-SMITH: I spoke with Columbia law school’s John Coffee
and he says that’s definitely part of it is a political motivation.
JOHN COFFEE: It is a public mood that requires that we look for wrongdoing before we just give the public money out. The public is still angry about the bailouts in 2008.
But Coffee points out that even if these cases do go to trial it will take awhile, we probably won’t actually see anybody in court until 2012.
CHIOTAKIS: Marketplace’s Stacey Vanek-Smith in New York. Stacey, thanks.
VANEK-SMITH: Thanks Steve.
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