A New York jury that voted not to convict a former mid-level Citigroup official of financial fraud made clear last week that it thought the real culprits in the nation's mortgage crisis have yet to be put on trial.
Jurors issued an unusual statement along with their verdict in the case of former Citi executive Brian Stoker, The New York Times reported.
"This verdict should not deter the S.E.C. from continuing to investigate the financial industry, review current regulations and modify existing regulations as necessary,” the statement, read out loud by Federal District Court Judge Jed Rakoff, said.
The jury acquitted Stoker of charges of defrauding clients in a $1 billion mortgage bond deal put together just before the housing market crashed in 2008. Stoker is the former director of Citigroup’s collateralized debt obligation unit.
But the jury was uneasy that the verdict might send the wrong signal -- that those responsible for the financial crisis could get away unscathed -- which is why the jurors included the statement.
“I wanted to know why the bank’s C.E.O. wasn’t on trial,” said jury foreman Beau Brendler, a Patterson, N.Y., freelance writer who hasn't worked full-time since Consumer Reports laid him off in 2009 and who penned the jury statement. “Citigroup’s behavior was appalling.”
Calls to prosecute Wall Street banks and dismay over the lack of action by the Obama administration have been numerous. There have been no criminal prosecutions levied against Wall Street banks and executives as a result of the crisis, and the likelihood of a signature case is looking increasingly thin, according to a separate NYT report.
The statement may mark the first time that a jury has directly urged the government to hold Wall Street accountable.
JPMorgan Chase Loses $2 Billion
On May 10th, the U.S.'s largest bank JPMorgan Chase announced one of its London trading desks had lost <a href="http://www.huffingtonpost.com/2012/05/10/jpmorgan-chase-london-whale_n_1507662.html?ref=business" target="_hplink">$2 billion on bad bets on credit derivatives</a>.
UBS Trader Loses $2 Billion
Kweku Adoboli, a trader for Swiss bank UBS, lost <a href="http://www.huffingtonpost.com/2011/09/15/ubs-traders_n_963715.html" target="_hplink">$2 billion on unauthorized trades in September 2011</a>.
MF Global Collapse
Brokerage firm <a href="http://www.huffingtonpost.com/2011/10/31/mf-global-to-file-for-bankruptcy_n_1066902.html" target="_hplink">MF Global filed for Chapter 11 bankruptcy</a> in October 2011 after a failed $6 billion bet on European debt.
Rogue Societe General Trader Loses $6 Billion
Hailed as "history's biggest rogue trading scandal" at the time, French trader Jerome Kerviel was convicted in October 2010 of <a href="http://www.huffingtonpost.com/2010/10/05/jerome-kerviel-rogue-fren_n_750464.html" target="_hplink">losing French bank Societe General around $6 billion</a> due to unauthorized trades.
Bear Sterns Bought By JPMorgan Chase
After a run on investment bank Bear Sterns nearly caused its collapse in 2007, JPMorgan bought the firm for $2 a share the following March, <a href="http://www.businessweek.com/bwdaily/dnflash/content/mar2008/db20080316_356646.htm" target="_hplink">Businessweek</a> reports.
AIG Largest Single Bailout
Insurance company AIG became the recipient of the <a href="http://www.huffingtonpost.com/2012/05/08/aig-bailout-realize-15-billion-profit-taxpaers-gao_n_1498645.html" target="_hplink">largest ever government bailout for a single corporation</a> when a $182 billion rescue package saved it from a liquidity crisis following a <a href="http://www.huffingtonpost.com/2012/05/08/aig-bailout-realize-15-billion-profit-taxpaers-gao_n_1498645.html" target="_hplink">downgrade of its credit rating</a> in 2008.
Washington Mutual Bankruptcy
One of the biggest players in retail banking and mortgages during the housing crisis, Washington Mutual filed for Chapter 11 in September 2008, after sustaining losses on billions of dollars worth of mortgage and home loans, <a href="http://www.cnbc.com/id/46793926/WaMu_Emerges_From_Bankruptcy_Protection" target="_hplink">CNBC</a> reports.
Citigroup came to the brink of collapse after it reported losses around $10 billion in 2007, in part due to failed mortgage investments, <a href="http://money.cnn.com/2008/01/15/news/companies/citigroup_earnings/index.htm" target="_hplink">CNNMoney</a> reported. To keep the bank afloat the government issued <a href="http://www.huffingtonpost.com/2008/11/23/feds-consider-plan-to-res_n_145856.html" target="_hplink">a $20 billion bailout in November of that year</a>.
Merill Lynch Shocks Investors With Big Loss
After projecting a $4.5 billion loss during the third quarter of 2007, Merrill Lynch shocked investors by reporting a $7.9 billion deficit from trading mortgage-backed securities and other structured products, <a href="http://money.cnn.com/magazines/fortune/fortune_archive/2007/11/26/101232838/" target="_hplink">according to CNNMoney</a>.
Barings Bank Collapse
One time star trader Nick Leeson was responsible for sinking British bank Barings after losing $1 billion when an an earthquake struck Kobe, Japan in 1995, causing his investments in the Nikkei to fail as the Japanese stock exchange crashed, <a href="http://www.time.com/time/specials/packages/article/0,28804,1937349_1937350_1937488,00.html" target="_hplink">TIME reported</a>.