Kai Ryssdal: OK, so the Justice Department didn’t actually say the financial crisis was nobody’s fault. But that’s what you get if you read between the lines of an announcement the feds made last night.
The government’s not going to prosecute Goldman Sachs in the last big case left over from the crisis — a subprime mortgage deal in which the investment bank didn’t tell investors the whole truth. Goldman did pay a $550 million fine to settle civil charges over the deal, but the DOJ says it can’t prove criminal intent.
Which leaves consumers four years on wondering who — if anyone — gets the blame. Our New York bureau chief Heidi Moore starts us off.
Heidi Moore: If the financial crisis were being hashed out on TV, a lot of people would be in jail right now.
“Law & Order” clip: By the time I’m done with you, you’ll be finished!
Frank Partnoy wishes it could be that easy. He’s a University of San Diego law professor who used to sell complex financial products on Wall Street.
Frank Partnoy: Unfortunately, life is not like “Law & Order.” We apply very different standards to Main Street and Wall Street. It’s relatively straightforward to go after street crime, but it’s awfully, awfully hard to go after Wall Street.
Some recent cases prove that. The Justice Department just dropped its potentially landmark investigation against Goldman Sachs. Last month, a Citigroup manager was acquitted of fraud fraud involving mortgage securities. But the jury encouraged the government to keep hunting for financial crimes.
Neil Barofsky: I think that it’s unlikely that we’re going to see any meaningful cases arising out of the financial crisis. I think that unfortunately, that horse has already left the barn.
That’s Neil Barofsky. He’s the former watchdog of the bank bailout program. He says after five years, the government is running out of time to bring these cases. And that leaves a baffling paradox, according to Frank Partnoy.
Partnoy: We’ll end up with epic financial crisis where at least Senate investigators suggested that crimes were committed, and yet no one goes to jail.
Carl Levin, the senator whose investigation triggered the case against Goldman, attributed the outcome to either weak laws or weak enforcement.
It seems that the worst economic meltdown since the Great Depression is just nobody’s fault.
In New York, I’m Heidi Moore for Marketplace.
Cheers to trustworthy journalism!
Give just $7/month to get your own KaiPA glass.