Matt Taibbi has said it before and he’ll say it again: Wall Street bankers responsible for the financial crisis need to be punished. The problem is, no one has the "real guts" to do it.
The sentiments are nothing new from the man who famously coined the term “Vampire Squid” in reference to Goldman Sachs. Earlier this month, Taibbi wrote a blog post slamming Attorney General Eric Holder for dropping charges relating to Goldman's bets against financial instruments it was selling to clients.
“The one thing you pay any lawyer to have is balls," he wrote. "Our nation’s top attorney has none,”
In the past, Taibbi has also noted that Wall Street bankers lack incentives not to commit crimes, especially when considering that “there’s been almost not a single instance of an individual suffering in any way for any of this stuff,” he said on "Viewpoint." Indeed, with the statute of limitations for alleged crimes during the financial crisis set to pass soon, that may be how things end up.
The giant Wall Street firm agreed to pay $550 million in July 2010 to settle civil fraud charges brought by the Securities and Exchange Commission. The SEC said Goldman had misled buyers of mortgage-related investments. Under the agreement, Goldman said it would pay $300 million in fines to the SEC and the rest of the money would go to compensate those who lost their investments. It was the largest penalty against a financial company in SEC history.
Angelo Mozilo, the co-founder and CEO of the failed mortgage lender, agreed to a $67.5 million settlement with the SEC in October 2010 to avoid a trial on civil fraud and insider trading charges. He was accused of misleading investors about the health of Countrywide's mortgage business. The SEC said Mozilo also sold $140 million in Countrywide stock while he had inside information about the company's increasing risk from bad home loans.
The nation's largest bank agreed in June 2011 to pay $153.6 million to settle civil fraud charges brought by the SEC. The bank was accused of misleading buyers of complex mortgage investments just as the housing market was collapsing. The SEC said that a division of the Wall Street bank failed to tell investors that a hedge fund helped select the investment portfolio and then bet that the portfolio would fail.
The bank in July 2011 agreed to pay $75 million to settle civil charges with the SEC that it had understated Citi's exposure to risky subprime mortgages. Former Citigroup Chief Financial Officer Gary Crittenden agreed to pay $100,000 in civil penalties and Arthur Tildesley Jr., the bank's former head of investor relations, agreed to pay $80,000 in civil penalties. The two were accused of failing to disclose more than $50 billion worth of potential losses from subprime mortgages. Citigroup also agreed to a separate $285 million settlement with the SEC. The SEC alleged that Citi steered investors toward a complete mortgage investment that it bet against in 2007. But the deal was struck down in November by a federal judge in New York City who said he could not determine whether the deal was fair.
The SEC in February 2011 brought civil fraud charges against three former IndyMac executives. Blair Abernathy, a former chief financial officer, agreed to pay more than $125,000 to settle the charges against him without admitting wrongdoing. The SEC charged Abernathy and the other two executives of misleading investors about the mortgage lender's finances before it collapsed in July 2008. The collapse and seizure by the government of IndyMac Bank with about $30.2 billion in assets was one of the biggest bank failures in U.S. history.