DOJ Won’t Prosecute Wall Street
Remember how bringing to justice those who facilitated the financial meltdown was supposedly a big priority for the Obama Administration? Well, according to The Wall Street Journal (subs. req’d.), that is not the case anymore:
“After a yearlong investigation, the Justice Department said Thursday that it won’t bring charges against Goldman Sachs Group Inc. GS +1.07%or any of its employees for financial fraud related to the mortgage crisis.
“In a statement, the Justice Department said ‘the burden of proof’ couldn’t be met to prosecute Goldman criminally based on claims made in an extensive report prepared by a U.S. Senate panel that investigated the financial crisis.
“‘Based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report,’ the statement read.
“The Justice Department reserved the right to bring charges in the future if new evidence emerges.
“In a statement Thursday, Goldman said: ‘We are pleased that this matter is behind us.’
“In April 2011, the U.S. Senate’s Permanent Subcommittee on Investigations published a scathing report on the financial crisis, highlighting Goldman as a culprit. Lawmakers accused the firm of breeding a greedy culture and running conflict-ridden businesses, and they said Goldman put its own interest ahead of clients.
“Sen. Carl Levin, D., Mich., chairman of the Senate’s subcommittee, said Goldman executives lied to Congress about the firm’s bets against the housing market. The accusation triggered a Justice Department probe of possible perjury.
“A spokeswoman for Mr. Levin’s office didn’t respond to a request for comment Thursday.
“The report concluded that even as securities firms flooded the market with securitized mortgages and advised clients to buy them, firms privately used words like ‘crap’ and ‘flying pig’ to describe the financial instruments. The department’s probe was launched when Goldman’s reputation already had been battered by civil-fraud charges filed against the New York company by the Securities and Exchange Commission. The SEC accused Goldman of fraud related to a mortgage-bond deal called Abacus 2007-AC1.
“Goldman was accused of failing to inform investors that hedge-fund firm Paulson & Co. had helped choose underlying securities in the deal and was betting against it.
“Goldman agreed to pay $550 million to end the SEC’s civil-fraud suit. The company said marketing materials for the Abacus deal contained “incomplete information.”
“The announcement comes amid criticism of the Justice Department from some lawmakers for what they contend are disappointing results in efforts to bring criminal cases against firms and individuals for crisis-related wrongdoing.
“Justice Department officials have defended the agency’s track record, and some legal experts have noted the difficulty of targeting specific individuals and firms given the enormity of the financial crisis.
“In the statement Thursday, the Justice Department said prosecuting financial fraud and ‘protecting the integrity of our banking system’ is and will continue to be the department’s ‘top priority.'”
The financial meltdown happened because the government forced these banks to give loans to people who could never pay them back. It is no wonder that the Justice Department couldn’t find anything illegal about what they did. Finding such evidence would have been traced back to the Democrats who initiated the forced loans in the first place.
The Obama Administration knew this was the case, yet they claimed to be on the side of those protesters who believed it was the banks that caused the meltdown through failing practices. It was misleading of the Administration and this will only add to the resentment felt by those who believe the President was on their side of this issue.