To respond to such a question - equivalent to determine why a dog not barking - is far from simple. But a private meeting in mid-October 2008 between Timothy f. Geithner, then President of the Reserve Bank of New York and Andrew M. Cuomo, Attorney General, of New York at the time, illustrates the complexity of Legal Affairs further in a moment of panic.
The fed, which oversees the largest banks in the country, Mr. Geithner has worked with the Department of the Treasury a Fund of large bailout for banks and led efforts to consolidate the American International Groupthe giant insurer. Its goal: stabilize world financial markets.
Mr. Cuomo, as an enforcer of Wall Street, had been questioning banks and agencies rating aggressively for more than a year on their roles in the growing debacle and A.I.G. bonus research also
Friendly since their days of the Clinton administration, the two meet in the Office of Mr. Cuomo, in Lower Manhattan steps of Wall Street and the New York Fed. According to three people have been informed at the time about the meeting, Mr. Geithner is concerned about the fragility of the financial system.
According to these people, its concern, was born of a desire to calm the markets, a goal that could be complicated by a charging hard Attorney General.
A spokesman for Mr. Cuomo, now the Governor of New York, asked if the unusual meeting had changed his approach, said Wednesday evening that "Mr. Geithner never suggested that there any lack of diligence or any slowdown.". Through a spokesman, Mr. Geithner, now the Secretary of the Treasury, said that he had been A.I.G. "for protect taxpayers".
If prosecutors and regulators have been fairly aggressive in pursuit of wrongdoing is likely to be since long a subject of debate. All say that they did the best they could under difficult circumstances.
But several years after the financial crisis, caused largely by the reckless loans made by large financial institutions of excessive risk, none of the executives were charged or imprisoned, and a collective effort of Government did not appear. This situation contrasts with the failure of many economies and late 1980s lending institutions. In the wake of this debacle, special Government task forces called 1 100 case prosecutors, which resulted in more than 800 employees of the Bank is in prison. Among the most well-known: Charles h. Keating Jr., Lincoln savings and loan in Arizona, and David Paul, of the Centrust Bank in Florida.
Former prosecutors, lawyers, bankers and Mortgage Corporation employees say that investigators and regulators ignored past lessons on how to crack the financial fraud.
As the crisis began to deepen in the spring of 2008, the Federal Bureau of Investigation discounted a plan to provide more field officers to investigate mortgage fraud. This summer, the appeals of Department of Justice also rejected to create a working group devoted to the investigations related to the mortgage, leaving these complex cases personal and poorly funded and only later developed a more general financial crimes task force.
Leading to the financial crisis, many officials, said in interviews, regulators of breach their crucial obligation to compile information that traditionally have helped to build criminal cases. Indeed, the same dynamic that has helped enable the crisis - low resolution - also makes more difficult to pursue fraud as a result.
A more aggressive mentality could have encouraged the prosecution much more this time, said the officials involved in the clean-up of s. & l...
"This is not some fiendish plot of two guys sitting in a room by saying that we must let people create capitalism and steal with impunity," said William k. Black, a Professor of law at the University of MissouriKansas City, Director of Federal Government litigation in the savings and loan crisis. "But their policies have created a unique criminogenic environment." There is no criminal references by regulatory agencies. Working groups no fraud. No national working group. No there was no effective punishment of elites here. ?
Civil actions by the Government have been limited. The Securities and Exchange Commission has adopted a general guideline in 2009 - distributed within the Agency, but never made public - to be cautious in pushing heavy sanctions of banks that received rescue money. The Agency was concerned about taxpayers ' money is used to pay for settlements, indeed according to four persons informed on policy, but who are not authorized to speak publicly.
Of course, the role of Wall Street in crisis is complex, and cases relating to mortgage-backed securities are extremely technical. Criminal intent is particularly difficult to prove and banks can defend their actions with the documents, they say show, they work well.
But legal experts point many dubious activities where the criminal probes could have borne fruit and could perhaps even.
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