Outrage: S.E.C. Lets Firms That Wrecked the Economy Get Away With Fraud

If you and I commit fraud by, say, writing a check for which we know we have no funds on deposit, or by selling a product we know cannot produce the benefits we claim for it, well, we go to jail. Wall Street moguls (and by that term I mean the largest financial firms in the country) who committed securities fraud on a grand scale and crashed the economy requiring the US taxpayers to bail them out, on the other hand, routinely pass go with nary a worry that their "indiscretions" will result in prosecution. Too big to fail means too big to bring to justice, as well. Over the past ten years large financial firms have frequently skipped merrily away from any punishment for their crimes by the Department of Justice, even when caught red-handed, according to a NY Times report:

[The SEC] has repeatedly allowed the biggest firms to avoid punishments specifically meant to apply to fraud cases. An analysis by The New York Times of S.E.C. investigations over the last decade found nearly 350 instances where the agency has given big Wall Street institutions and other financial companies a pass on those or other sanctions. Those instances also include waivers permitting firms to underwrite certain stock and bond sales and manage mutual fund portfolios. JPMorganChase, for example, has settled six fraud cases in the last 13 years, including one with a $228 million settlement last summer, but it has obtained at least 22 waivers, in part by arguing that it has "a strong record of compliance with securities laws." Bank of America and Merrill Lynch, which merged in 2009, have settled 15 fraud cases and received at least 39 waivers.

This is a bipartisan failure, for it has not made any difference who sat in the Oval Office over the past decade, the results have been the same. The rich financiers fleece the rest of us while making profits off their criminal malfeasance, and both Republican and Democratic administrations have turned a blind eye toward their fraud and deceit, crimes that have cost our economy trillions of dollars, led to massive unemployment and what would be called outright theft, if an individual burglar were involved rather than a multi-billion dollar institution.

Yet, why should they change their ways? No one is holding them accountable now for their nefarious schemes. We've have had proof since a Congressional Committee report issued last year that Wall Street firms rigged the Mortgage backed derivatives game to benefit themselves and defraud their customers on a massive scale:

The great and powerful Oz of Wall Street was not the only target of Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the 650-page report just released by the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan, alongside Republican Tom Coburn of Oklahoma. Their unusually scathing bipartisan report also includes case studies of Washington Mutual and Deutsche Bank, providing a panoramic portrait of a bubble era that produced the most destructive crime spree in our history — "a million fraud cases a year" is how one former regulator puts it.

These fraudulent criminal schemes led to the near collapse of our global economy, yet what has been done since then to bring the principals, corporations and individual alike, who were responsible for these frauds, to justice? Next to nothing, unfortunately. Republicans rail against the (meager) oversight and reforms passed by the Democrats prior to the 2010 mid-term elections and would overturn them in a heartbeat if they could, and prominent Democrats, including my Senator from New York, Chuck Schumer stands in Wall Street's corner, ever alert to protect these "mobsters" (for that is in effect what they are) from ever having to face the music.

And people still question why the Occupy Wall Street movement arose, organically, and attracted so many adherents to its cause despite lack of funding from billionaires like the Koch brothers, physical abuse by law enforcement of peaceful protesters and the unlawful use of force and arrests of thousands of people merely for seeking to express their first amendment rights.

The answer is obvious. It's as plain as the millions of corporate dollars pouring into to "Super Pacs" to run unprecedented numbers of attack ads in 2010 and in the Republican primaries this year, thanks to a Supreme Court that defines money as speech and includes corporations as "persons" (albeit persons with far more cash to exercise their "free speech rights), and no police officers to bash in their skulls, or use pepper spray designed to thwart grizzly bear attacks against them, when they do.

We are in the midst of a crisis far worse than any we have faced since the Civil War. A crisis that has resulted in the loss of our civil liberties at the expense of monopolistic multinational corporations. It is a fair question to ask if we are even a democracy anymore, though we follow the forms of holding elections, because of the the immense influence corporations exert over the individuals we "elect" as