# Could we convict major bank and Wall Street figures?
**URL:** https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463
**Category:** Great Debates
**Created:** [March 20, 2013, 4:45pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463 "2013-03-20T16:45:14Z")
**Posts on this page:** 20
**Page:** 2
### Author:  [@deltasigma](https://boards.straightdope.com/u/deltasigma)
#### Post date: [March 20, 2013, 9:52pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/21 "2013-03-20T21:52:38Z")
> [@Little\_Nemo](#):
>
> My guess is politics was a factor - but not crime or corruption. At the levels we’re talking about, people rewrite the laws to make what they’re doing legal. The money that was paid to politicians would have legal donations not illegal bribes. And as a result of that money, the laws would have been changed enough so that what was done was technically legal.
I think that’s pretty much the case with respect to reserve requirements regarding derivatives, although I’m not sure at this point how much was an actual loosening of reserve requirements and how much was due to the fact that the derivatives market was so new that there simply weren’t any requirements. I think it was a little of both but I’d be hard pressed to find a cite. The best I could do with a quick google was [this pastiche from 2008](http://www.propublica.org/article/top-regulators-once-opposed-regulation-of-derivatives)
---
### Author:  [@Shodan](https://boards.straightdope.com/u/Shodan)
#### Post date: [March 20, 2013, 9:56pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/22 "2013-03-20T21:56:55Z")
> [@Ann\_Hedonia](#):
>
> They purchased loans that they KNEW were fraudulent, packaged them into MBS securities — in some cases hand-picking the crappiest loans they could find - and sold them to customers like pension funds and municipalities as solid investments that were "as good as cash-- in some cases paying off the ratings agencies to agree with them.
Could you please produce your evidence listing
[ul][li]Who, specifically, bought the loans[/li][li]How they knew that the loans were fraudulently obtained[/li][li]Who, specifically, they paid off in the ratings agencies[/li][li]What the payoffs were, and when were they made[/li][li]The dates on which this occurred[/li][/ul]
> [@](#):
>
> Unfortunately there is a sentiment in the Treasury and Justice departments that prosecution of these crimes would further undermine consumer confidence in the economy so these crimes have gone unpunished for the most part.
Could you also produce a cite from officials at the Treasury and/or Justice departments, in which they state that they have evidence of crime sufficient to justify indictment, but on which they have not proceeded because of a fear of undermining consumer confidence?
Thanks in advance.
Regards,
Shodan
---
### Author:  [@deltasigma](https://boards.straightdope.com/u/deltasigma)
#### Post date: [March 20, 2013, 10:13pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/23 "2013-03-20T22:13:29Z")
**Shodan** : The phenomenon was so widespread and well know that there is a wikipedia entry for it - [NINJA loan](http://en.wikipedia.org/wiki/No_Income_No_Asset). I’m sorry to be rude, but just because \*you \*don’t know about something doesn’t mean it didn’t happen.
edit: I think AH is however incorrect about the Treasury recapitalizing the banks. They DID do that in a few cases but I believe all of those loans have been repaid. What they might owe the Federal Reserve in terms of paper they sold to the fed at perhaps a higher than market value is another issue entirely.
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### Author:  [@Ann\_Hedonia](https://boards.straightdope.com/u/Ann_Hedonia)
#### Post date: [March 20, 2013, 11:14pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/24 "2013-03-20T23:14:27Z")
QUOTE=Shodan;16116664]Could you please produce your evidence listing
[ul][li]Who, specifically, bought the loans[/li][li]How they knew that the loans were fraudulently obtained[/li][li]Who, specifically, they paid off in the ratings agencies[/li][li]What the payoffs were, and when were they made[/li][li]The dates on which this occurred[/li][/ul]
I was going to post a couple dozen links but here’s a comprehensive page
[http://www.sec.gov/spotlight/enf-actions-fc.shtml](http://www.sec.gov/spotlight/enf-actions-fc.shtml)
And there’s this gem…
> **[Bank of America Agrees to Pay $137.3 Million in Restitution to Federal and...](https://www.justice.gov/opa/pr/bank-america-agrees-pay-1373-million-restitution-federal-and-state-agencies-condition-justice)**
>
> Bank of America entities have agreed to pay a total of $137.3 million in restitution to federal and state agencies for its participation in a conspiracy to rig bids in the municipal bond derivatives market and as a condition of its admission into the...
Could you also produce a cite from officials at the Treasury and/or Justice departments, in which they state that they have evidence of crime sufficient to justify indictment, but on which they have not proceeded because of a fear of undermining consumer confidence?
> **[Realities Behind Prosecuting Big Banks](https://archive.nytimes.com/dealbook.nytimes.com/2013/03/11/big-banks-go-wrong-but-pay-a-little-price/)**
>
> Recent comments by the attorney general seem to contradict the administration’s view that too-big-to-fail was fixed by the Dodd-Frank financial regulation law.
---
### Author:  [@deltasigma](https://boards.straightdope.com/u/deltasigma)
#### Post date: [March 20, 2013, 11:18pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/25 "2013-03-20T23:18:38Z")
Shodan and Human Action: OT, sorry for being bitchy before. ❤
---
### Author:  [@newcomer](https://boards.straightdope.com/u/newcomer)
#### Post date: [March 21, 2013, 1:42am UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/26 "2013-03-21T01:42:44Z")
> [@bump](#):
>
> You’re basically saying that these guys did something through selfishness and greed that caused an economic downturn and caused a bunch of people a bunch of hardship and therefore, somehow, must be illegal in some way, and they must be thrown in jail.
>
> If that’s what you’re getting at, you entirely missed the point of what I was saying. What I’m saying is that they likely didn’t do anything that was actually illegal- point to a criminal law and explain how what they did was in violation of that law. If it was that easy, they’d already have been tried, and assuming they were found guilty, sentenced.
>
> The other point I was trying to make is that the negative feedback for the sort of behavior for those guys is career loss, reputation loss, their firms cratering, restructuring of the financial system, etc… all stuff that’s pretty awful for financial guys.
>
> This didn’t happen because of the bailouts. That’s why bailouts are the moral hazard that **Human Action** spoke of. The bailouts in essence removed the penalty for doing financially risky stuff, and sent a message that if you fuck up on a large enough scale, you’ll get bailed out, which pretty much tells the financial guys to go big or go home.
>
> And… I don’t think it was incompetence as much as I think it was the same idiotic group-think / herd behavior / tulip-mania behind the internet crash 8 years before- mistaken assumptions about the trajectory of the economy and business that eventually reach an unsustainable fever pitch and then quickly crater.
> Here’s my take on what happened- for whatever reason, the lending rules were relaxed, and a lot of houses were being sold to people who wouldn’t have qualified under the old 30 year note, 20% down type criteria. That’s the root of the problem, ultimately.
>
> Then on top of that, the mortgages were batched up into mortgage-backed securities and sold to institutional investors. Which wouldn’t have been an issue at all, had the underlying mortgages been sound in the first place, but they weren’t.
>
> Had the original mortgages not been sketchy, this probably never would have been an issue, which is more or less paraphrasing what **deltasigma** said.
Lending rules were never relaxed.
There was a commercial fraud committed.
No prosecution happened because your Government is corrupted more than a cheap hooker in Panama.
You try to forge a cheque or credit card you will go to jail at least 6 months. You do insider trading and make millions you settle.
Read more - [http://www.nytimes.com/2010/05/28/business/28pequot.html?\_r=0](http://www.nytimes.com/2010/05/28/business/28pequot.html?_r=0)
That’s what happens. Well connected dudes settle - you go to jail.
On a related note, I would love to see where did you read or who told you that there was no law broken? Because HBO is looking for some fantasy fiction projects to shoot thi summer.
---
### Author:  [@bump](https://boards.straightdope.com/u/bump)
#### Post date: [March 21, 2013, 3:12am UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/27 "2013-03-21T03:12:06Z")
> [@newcomer](#):
>
> Lending rules were never relaxed.
>
> There was a commercial fraud committed.
>
> No prosecution happened because your Government is corrupted more than a cheap hooker in Panama.
>
> You try to forge a cheque or credit card you will go to jail at least 6 months. You do insider trading and make millions you settle.
>
> Read more - [http://www.nytimes.com/2010/05/28/business/28pequot.html?\_r=0](http://www.nytimes.com/2010/05/28/business/28pequot.html?_r=0)
>
> That’s what happens. Well connected dudes settle - you go to jail.
>
> On a related note, I would love to see where did you read or who told you that there was no law broken? Because HBO is looking for some fantasy fiction projects to shoot thi summer.
Your link is an idiotic example- it’s dealing with insider trading and has nothing to do with the subprime lending crisis of 2008. Maybe if you bothered to look up how it happened, you’d have a clue what you’re talking about, instead of insisting it’s totally due to “my” corrupt government.
The whole thing started with predatory lending and the massive expansion of subprime mortgages, i.e. high risk mortgages that people have a hard time paying off. Things like adjustable rate mortgages, ones with large balloon payments, etc…
Had the MBS(mortgage backed securities) been composed of the usual 30yr/20% down type mortgages from people with FICO scores over 640 or so, the whole thing likely wouldn’t have happened in the first place.
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### Author:  [@deltasigma](https://boards.straightdope.com/u/deltasigma)
#### Post date: [March 21, 2013, 3:25am UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/28 "2013-03-21T03:25:23Z")
> [@bump](#):
>
> The whole thing started with predatory lending and the massive expansion of subprime mortgages, i.e. high risk mortgages that people have a hard time paying off. Things like adjustable rate mortgages, ones with large balloon payments, etc…
That’s all true, but the single biggest issue was the fact that they qualified people on the ARM loans at artificially low “teaser” rates. So for example the actual rate might be say 6% but the first year teaser rate might be 3.5 or 4% and that’s the rate they would “underwrite” you at. Of course the very next year your rate went up to whatever the going rate was and bam - default.
---
### Author:  [@Ann\_Hedonia](https://boards.straightdope.com/u/Ann_Hedonia)
#### Post date: [March 21, 2013, 1:05pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/29 "2013-03-21T13:05:10Z")
> [@deltasigma](#):
>
> **Shodan** : The phenomenon was so widespread and well know that there is a wikipedia entry for it - [NINJA loan](http://en.wikipedia.org/wiki/No_Income_No_Asset). I’m sorry to be rude, but just because \*you \*don’t know about something doesn’t mean it didn’t happen.
>
> edit: I think AH is however incorrect about the Treasury recapitalizing the banks. They DID do that in a few cases but I believe all of those loans have been repaid. What they might owe the Federal Reserve in terms of paper they sold to the fed at perhaps a higher than market value is another issue entirely.
You’re right in that they aren’t doing it so much TODAY but in the years following the crisis - **during the time the banks were being fined** – they did it to the tune of 9 trillion or so
> **[Federal Reserve made $9 trillion in emergency loans - Dec. 1, 2010](https://money.cnn.com/2010/12/01/news/economy/fed_reserve_data_release/index.htm)**
>
> Federal Reserve reveals details of more than 21,000 transactions it had with banks and Wall Street firms during height of financial crisis.
Trillion with a T…or 9 million million dollars
This is a lot of money…enough to pay off every outstanding mortgage in the USA and to buy an average priced house for every family that doesn’t own one.
Then there is this little program which expired at the end of 2012 in which our tax dollars were used to guarantee repayment of loans the banks made to each other, removing all risk from the loan process
> **[Temporary Liquidity Guarantee Program | FDIC.gov](https://www.fdic.gov/banker-resource-center/temporary-liquidity-guarantee-program)**
> **[Monthly Reports Related to the Temporary Liquidity Guarantee Program | FDIC.gov](https://www.fdic.gov/banker-resource-center/monthly-reports-related-temporary-liquidity-guarantee-program-69)**
The deliberate issuance of billions of dollars in bad and even fraudulent debt was fueled by demand from the top down and is only part of the financial crisis story. The really obscene part of the scam lies in the techicalities of how these bad and sometimes blatantly counterfeit loans were packaged and sold, and how the large financial institutions reacted when they became aware of the problem… but that seldom shows up in the “Financial Crisis for Dummies” version of the story sold to the general public
Imagine if an auto manufacturer became aware of a fatel flaw in one of their products and instead of sending out recall notices they continued to sell the cars to unsuspecting customers… and then took out life insurance policies on those customers.
I recommend the following books for more juicy tales of malefesance
Neil Barofsky----------- Bailout
Matt Taibbi ------------Griftopia
Michael Lewis-----------The Big Short
Jeff Counnaght…The Payoff - Why Wall Street Always Wins
and the long but suprisingly readable
Wall Street and the Financial Crisis ---- by the Permanent Subcommittee on Investigations of the US Congress
which is available as a FREE Kindle download
A note to those who may feel my reading list is biased
I enjoy reading books about ALL viewpoints but I have yet to find a book supporting the conservative notion that the banks were forced to make bad loans by the Community ReInvestment Act and that the bankers were the heros of the story— only rather thin Op-Ed pieces. If someone can recommend a book expousing this POV I’ll gladly give it a shot.
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### Author:  [@Bricker](https://boards.straightdope.com/u/Bricker)
#### Post date: [March 21, 2013, 1:36pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/30 "2013-03-21T13:36:06Z")
> [@deltasigma](#):
>
> That’s all true, but the single biggest issue was the fact that they qualified people on the ARM loans at artificially low “teaser” rates. So for example the actual rate might be say 6% but the first year teaser rate might be 3.5 or 4% and that’s the rate they would “underwrite” you at. Of course the very next year your rate went up to whatever the going rate was and bam - default.
And that’s a criminal act?
---
### Author:  [@newcomer](https://boards.straightdope.com/u/newcomer)
#### Post date: [March 21, 2013, 1:54pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/31 "2013-03-21T13:54:13Z")
> [@bump](#):
>
> Your link is an idiotic example- it’s dealing with insider trading and has nothing to do with the subprime lending crisis of 2008. Maybe if you bothered to look up how it happened, you’d have a clue what you’re talking about, instead of insisting it’s totally due to “my” corrupt government.
>
> The whole thing started with predatory lending and the massive expansion of subprime mortgages, i.e. high risk mortgages that people have a hard time paying off. Things like adjustable rate mortgages, ones with large balloon payments, etc…
>
> Had the MBS(mortgage backed securities) been composed of the usual 30yr/20% down type mortgages from people with FICO scores over 640 or so, the whole thing likely wouldn’t have happened in the first place.
Look, I was trying to stay on topic which is: “Could we convict major bank and Wall Street figures?”
The link was supposed to explain that even very-obvious and clear-cut criminal cases when they involve well-connect Wall Street bankers tend to drag and don’t result in any jail time. It was an example of how your Government is corrupt and you still defy.
Also, I really don’t need you to explain to me how it all started for two reasons, one, even the birds on the trees sing about it by now and two, I was in the middle of it working for a big US bank at that time in risk department specifically attending to securitization. I know ALL about it.
What’s frustrating is this need to continually rehash and semantically re-elaborate the whole thing all the while carefully staying within a paradigm of incompetence and no laws were broken. Like you would know!?
Looking at cites Ann Hedonia is putting out one can only laugh how far from what’s happening people are. I mean, really… if I was AG or Treasury Secretary I’d laugh my ass off and go on with my life the way I intended.
---
### Author:  [@newcomer](https://boards.straightdope.com/u/newcomer)
#### Post date: [March 21, 2013, 2:03pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/32 "2013-03-21T14:03:13Z")
> [@Bricker](#):
>
> And that’s a criminal act?
Manipulation of securities market is one of the categories in criminal code.
Knowingly putting out on the market and obtaining profit from (in their words) “shitty” securities is a criminal offence. Or, simply fraud.
> [@](#):
>
> Dissemination of false or misleading market information through media, including the Internet, or by any other means. The dissemination is done in order to move the price of a security, a derivative contract or the underlying asset in a direction that is favorable to the position held or a transaction planned by the person disseminating the information.
> **[World Bank Group - 404 Error](http://message.worldbank.org/www-ext-404.html)**
No? Should I brace myself for semantic storm after which I’ll confirm that you are right and I’m wrong?
---
### Author:  [@John\_Mace](https://boards.straightdope.com/u/John_Mace)
#### Post date: [March 21, 2013, 2:16pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/33 "2013-03-21T14:16:48Z")
> [@newcomer](#):
>
> Manipulation of securities market is one of the categories in criminal code.
>
> Knowingly putting out on the market and obtaining profit from (in their words) “shitty” securities is a criminal offence. Or, simply fraud.
>
> [World Bank Group - 404 Error](http://info.worldbank.org/etools/docs/library/156006/pillars/pdfs/bib/investigating.pdf)
> No? Should I brace myself for semantic storm after which I’ll confirm that you are right and I’m wrong?
Can you give us an example of some “ARM teaser rate loans” that meet the requirements for criminality under that statute? That is, something like the recipients of the loans were not told that it was an ARM or that they were not told when the rates were change?
I mean, ARMs with teaser rates are SOP in the lending business. You’re not going to find any major figures who don’t have lawyers making sure their loan contracts comply with the law.
---
### Author:  [@hotflungwok](https://boards.straightdope.com/u/hotflungwok)
#### Post date: [March 21, 2013, 2:17pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/34 "2013-03-21T14:17:08Z")
So how did Iceland do it?
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### Author:  [@Bricker](https://boards.straightdope.com/u/Bricker)
#### Post date: [March 21, 2013, 2:21pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/35 "2013-03-21T14:21:19Z")
> [@newcomer](#):
>
> Manipulation of securities market is one of the categories in criminal code.
>
> Knowingly putting out on the market and obtaining profit from (in their words) “shitty” securities is a criminal offence. Or, simply fraud.
>
> [World Bank Group - 404 Error](http://info.worldbank.org/etools/docs/library/156006/pillars/pdfs/bib/investigating.pdf)
> No? Should I brace myself for semantic storm after which I’ll confirm that you are right and I’m wrong?
That link refers to a World Bank document that discusses general aspects of conduct and is littered with caveats about how specific statements therein apply (or don’t apply) to some jurisdictions.
> [@](#):
>
> In some jurisdictions, manipulation may be prosecuted under rules that govern
> fraudulent activity. As an example, one jurisdiction can prosecute as a fraud, a
> transaction in a security that either creates actual or apparent trading in such security or
> causes a rise or decline in the price of such security, and that is intended to defraud or
> that operates as a fraud or deceit, upon the market for the security.
> Rules imposing disclosure requirements should be considered as an additional tool for
> preventing manipulation. For example, requesting the issuer of listed securities to
> disclose timely price sensitive information is aimed, among other things, at reducing
> information asymmetries that can facilitate manipulation. The timely dissemination of
> trading data (both pre and post-trade) is also crucial to reduce information asymmetries
> among market participants.
> Some jurisdictions may also have rules that prohibit manipulation in specific situations.
> For example, such rules can prohibit manipulative activities on particular markets. In
> addition, a jurisdiction can have rules that prohibit manipulation by particular market
> participants. Some rules require a showing of manipulative intent or purpose. In addition
> to the broad prohibitions at the core of anti-manipulation rules, there are a number of
> other provisions and tools designed to prevent manipulation. Some are discussed
> below.
Further, the “rules” discussed may be civil or criminal in nature – violation of a rule might be cause for a civil action against the actor, but not a criminal case.
So I’m asking for a cite to US Code, something that lays out a crime and the elements of that crime, together with an example of what conduct actually happened that is a violation of that criminal statute.
---
### Author:  [@Ann\_Hedonia](https://boards.straightdope.com/u/Ann_Hedonia)
#### Post date: [March 21, 2013, 2:35pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/36 "2013-03-21T14:35:45Z")
This summary of prosecutions is found on the SEC website…
Number of Entities and Individuals Charged 154
Number of CEOs, CFOs, and Other Senior Corporate Officers Charged 65
Number of Individuals Who Have Received Officer and Director Bars, Industry Bars, or Commission Suspensions 36
Penalties Ordered or Agreed To \> $1.53 billion
Disgorgement and Prejudgment Interest Ordered or Agreed To \> $756 million
Additional Monetary Relief Obtained for Harmed Investors $400 million\*
Total Penalties, Disgorgement, and Other Monetary Relief $2.68 billion
- In settlements with Evergreen, J.P. Morgan, State Street, TD Ameritrade, and Claymore Advisors
---
### Author:  [@Human\_Action](https://boards.straightdope.com/u/Human_Action)
#### Post date: [March 21, 2013, 2:44pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/37 "2013-03-21T14:44:25Z")
> [@hotflungwok](#):
>
> So how did Iceland do it?
[Let’s see…](http://en.wikipedia.org/wiki/Iceland_financial_problems#Criminal_investigation)
> [@](#):
>
> Baldur Guðlaugsson, Permanent Secretary of the Ministry of Finance, was sentenced to two years probation by the District Court of Reykjavík for insider trading. The case was remitted to the Supreme Court of Iceland which upheld the ruling.
[This gentleman](http://www.bloomberg.com/news/2012-02-17/iceland-court-upholds-prison-sentence-for-ministry-official-1-.html)
> [@](#):
>
> sold shares he owned in failed lender Landsbanki Islands hf two weeks before the bank’s collapse. The court found that the decision to sell his stake in the bank was based on information obtained through his post as a member of a government committee appointed to monitor financial stability.
That’s illegal here, too, of course.
> [@](#):
>
> Aron Karlsson was sentenced to 2 years in prison by the District Court of Reykjavík for defrauding Arion Bank in real estate dealings.
[This character](http://www.grapevine.is/Home/ReadArticle/Two-Years-For-Real-Estate-Fraud)
> [@](#):
>
> The property was originally owned by Vindasúlna ehf, Vísir reports, a company Aron and Karl owned. On December 2, 2009, an offer was made to buy the property. Nine days later, ownership of the company was moved to another company, called 2007 ehf. Three days later, the same party who made the initial bid on the property made another offer, to buy it for 575 million ISK. On December 16, the banks which had mortgages on the property, Glitnir and Íslandsbanki, began to process the sale. However, a day later, the property owners then ended up selling the property to the Chinese embassy for 870 million ISK.
>
> The banks believed the activity was suspicious, and reported the matter to the police. Investigations were launched, culminating in the search of three locations on January 9, 2010, among them the offices of Aron and Karl. Evidence showed that the two had engaged in fraud and market manipulation in order to give the false impression of increasing demand for the property.
Actual market manipulation.
> [@](#):
>
> Lárus Welding, CEO of Glitnir, and Guðmundur Hjaltason, Managing Director of Corporate Banking of Glitnir, were sentenced to 9 months in prison by the District Court of Reykjavík for a major breach of trust. Out of the 9 months, 6 are probationary for 2 years.
[These guys](http://www.icelandreview.com/icelandreview/daily_news/Icelandic_Bankers_Convicted_in_Vafningur_Case_0_396548.news.aspx)
> [@](#):
>
> The pair were charged for having given Milestone an illegal ISK 10 billion (USD 79 million, EUR 59 million at today’s exchange rate) loan in February 2008, thereby jeopardizing Glitnir’s finances.
>
> They argued that they had never agreed to granting the loan to Milestone—it was supposed to go to Vafningur but someone within the bank decided at the last minute to switch recipients.
>
> The jury concluded that Lárus and Guðmundur were not able to credibly explain why their signatures could be found on an informal request for a loan, which usually does not have to be signed by the bank’s chief executives and that it is “absurd” that their subordinates would decide on their own to grant the loan to Milestone instead of Vafningur.
>
> The defendants were therefore found to have acted outside their scope of authority and abused their position in agreeing to the illegal loan, exceeding the bank’s maximum risk exposure towards Milestone by ISK 4 billion.
So, they violated a statute limiting a firm’s exposure to a single entity, it seems.
> [@](#):
>
> Friðfinnur Ragnar Sigurðsson, Glitnir employee, was sentenced to 1 year in prison by the District Court of Reykjanes for insider trading.
Less information out there about [this guy.](http://www.bloomberg.com/news/2013-03-11/ex-glitnir-banker-sigurdsson-gets-12-months-for-insider-trading.html)
> [@](#):
>
> The former executive was indicted for “insider trading” for having on five separate occasions in 2008 sold a total of 1.26 million Glitnir shares for 20.1 million kronur ($159,000), according to the prosecution.
So, how did Iceland do it? They identified people who’d actually violated statutes, and prosecuted them. The same way we do things in the U.S.
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### Author:  [@newcomer](https://boards.straightdope.com/u/newcomer)
#### Post date: [March 21, 2013, 2:50pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/38 "2013-03-21T14:50:56Z")
> [@John\_Mace](#):
>
> Can you give us an example of some “ARM teaser rate loans” that meet the requirements for criminality under that statute? That is, something like the recipients of the loans were not told that it was an ARM or that they were not told when the rates were change?
>
> I mean, ARMs with teaser rates are SOP in the lending business. You’re not going to find any major figures who don’t have lawyers making sure their loan contracts comply with the law.
I wasn’t talking about mortgage contracts. These all are a case of a separate fraudulent activity that is much more difficult to untangle but the fraud in that department was as widespread as robo-signatures. It’s volume, volume, volume!
Anyhow, I was talking about securities market where these and similar mortgages were packaged and sold. Such activity is the most responsible for furious multiplication of the markets valuation and thus size of assets.
Something like this - [http://online.wsj.com/public/resources/documents/WSJ\_GSQUOTES.pdf](http://online.wsj.com/public/resources/documents/WSJ_GSQUOTES.pdf)
The funny thing is, this is still in courts - [http://therealdeal.com/blog/2013/03/18/supreme-court-wont-hear-goldman-sachs-mbs-appeal/](http://therealdeal.com/blog/2013/03/18/supreme-court-wont-hear-goldman-sachs-mbs-appeal/)
System works 😃
On a separate note, it looks as if any of Dopers ever read anything by Matt Taibbi. He actually packs it very concise and to the point so he might be a tiny bit too obvious for some.
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### Author:  [@Ann\_Hedonia](https://boards.straightdope.com/u/Ann_Hedonia)
#### Post date: [March 21, 2013, 3:04pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/39 "2013-03-21T15:04:18Z")
> [@newcomer](#):
>
> On a separate note, it looks as if any of Dopers ever read anything by Matt Taibbi. He actually packs it very concise and to the point so he might be a tiny bit too obvious for some.
No suprise here but I’m a huge Taibbi fan.
I stuck to official government sites for the most part when I was posting my cites earlier but these are much more entertaining and guaranteed to induce lots of recreational outrage.
On BOA
> **[Matt Taibbi on Bank of America: Too Crooked to Fail](https://www.rollingstone.com/politics/politics-news/bank-of-america-too-crooked-to-fail-232177/)**
>
> The bank has defrauded everyone from investors and insurers to homeowners and the unemployed. So why does the government keep bailing it out?
ON HSBC
> **[Taibbi: Too Big to Jail](https://www.rollingstone.com/politics/politics-news/gangster-bankers-too-big-to-jail-102004/)**
>
> How HSBC hooked up with drug traffickers and terrorists. And got away with it
On Goldman Sachs
> **[The People vs. Goldman Sachs: Why Top Execs Should Stand Trial](https://www.rollingstone.com/politics/politics-news/the-people-vs-goldman-sachs-245191/)**
>
> A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges
And on all the sleazebags in general
> **[Looting Main Street](https://www.rollingstone.com/politics/politics-news/looting-main-street-196661/)**
>
> How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece
> **[Inside the Foreclosure Crisis](https://www.rollingstone.com/politics/politics-news/invasion-of-the-home-snatchers-185849/)**
>
> How foreclosure courts are helping big banks screw over homeowners
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### Author:  [@Tom\_Scud](https://boards.straightdope.com/u/Tom_Scud)
#### Post date: [March 21, 2013, 3:14pm UTC](https://boards.straightdope.com/t/could-we-convict-major-bank-and-wall-street-figures/653463/40 "2013-03-21T15:14:38Z")
Given that there wasn’t even a criminal prosecution of anyone at HSBC (and I think we can all agree that laundering billions of dollars for drug cartels is actually criminal, if proven?), it looks like the banks are pretty much prosecution-proof.
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