As evidence has continually trickled out about the numerous criminally fraudulent activities Wall Street firms engaged in that led to the housing crash, increasing amounts of attention has been focused on regulators that seem to have given banksters a pass. When it came to disciplining finance capital, as one former Wall Street lawyer turned Attorney General put it, the financial service firms were Too Big To Jail.
Now a story by The American Lawyer seems to provide serious evidence that the SEC essentially planned to ensure that Wall Street firms would never be held fully accountable for their crimes. That there was collusion between the banksters and the SEC that CDO prosecutions would be limited in number and impact.
Or as Felix Salmon put it:
Back in 2011, I asked whether the SEC was colluding with banks on CDO prosecutions. And now, thanks to an American Lawyer Freedom of Information Request, we have the answer: yes, they were. This comes as little surprise: it beggared belief, after all, that every bank would end up being prosecuted for one and only one CDO…
Now that this information is public, the SEC should apologize to all of us for its behavior, and promise not to collude with Wall Street again. If it doesn’t, that’s a clear sign that Wall Street’s most salient watchdog is still as captured as ever.
Yeah, I wouldn’t hold my breathe on that apology coming nor any indication that the SEC is going to start acting like a watchdog instead of a lapdog given that a retiring lawyer for the SEC who worked on the Goldman Sachs case said that lawyers and officials at the SEC are “more focused on getting high-paying jobs after their government service than on bringing difficult cases.”
If your focus is on getting hired by one of the Too Big To Jail firms the last thing you would do is bang them hard in court. So the collusion will likely go on.