Aug 102012
 

A New York jury didn’t just acquit a midlevel Citibank executive, they sent a strong, clear message to Washington.

The only question is, how do we get Washington to start listening?

The message came along with a not guilty verdict in the case of a Citibank executive, accused by the SEC of negligence for failing to provide disclosures to clients that his own bank was betting against the complex financial packages that the bank was selling.

Brian Stoker’s lawyer argued that he was just one of many who were doing the same thing in Citibank’s employ.

The attorney argued that it was others, higher up the chain of command at Citibank,  who had committed the misconduct.

Evoking the child’s book, “Where’s Waldo?” the lawyer, John Keker, invited jurors find those hidden characters who were really to blame.

Not only did the jurors acquit Stoker, they wrote an unusual letter to the SEC: “This verdict should not deter the SEC from continuing to investigate the financial industry, review current regulations and modify existing regulations as necessary,” the jurors wrote.

Twenty-three year old juror Travis Dawson told the New York Times: “I’m not saying that Stoker was 100 percent innocent, but given the crazy environment back then it was hard to pin the blame on one person. Stoker structured a deal that his bosses told him to structure, so why didn’t they go after the higher-ups rather than a fall guy?”

And the jury foreman, Beau Brendler, told American Lawyer magazine: ”I would like to see the CEOs of some of these banks in jail or given enormous fines,” he said, “not a lower level employee.”

In a separate case, Citibank has already agreed to pay a fine on the collateralized debt obligations at the heart of the case against Stoker.

While the Justice Department is touting that civil fines for fraud have skyrocketed, the Times reported that prosecutions against individuals, especially those at the top, are rare to nonexistent.

“A lot of people on the street, they’re wondering how a company can commit serious violations of securities laws and yet no individuals seem to be involved and no individual responsibility was assessed,” Sen. Jack Reed, Democrat of Rhode Island and chairman of a subcommittee that oversees securities regulation, said at a recent hearing.

The SEC has been hobbled by 20 years of inadequate funding and a revolving door that delivers SEC lawyers right into jobs with the firms that they’re supposed to be regulating, or with the law firms that represent those firms.

And that’s not the worst of it.

Prosecutors take their cues from the top. The Obama administration, from the president to his treasury secretary, Tim Geithner and his attorney general, Eric Holder, has consistently blamed the 2008 financial collapse on stupidity and greed but said that most of the worst banker conduct was not illegal. President Obama has paid only lip service to holding bankers accountable while doing nothing.

The most recent example is a mortgage fraud task force the president announced in January. It took months to get staff and office and the task force has done little more than issue a couple of subpoenas and some press releases.

So it’s no wonder that the SEC continues to avoid pursuing the financial elite.

Meanwhile, both presidential candidates and the big media continue to ignore the issue of banker accountability.

As Mike Lux has pointed out, in the 2010 exit polls, 37 percent of voters blamed Wall Street for the on-going weak condition of the U.S. economy. Those voters, who are angry at Wall Street and skeptical of government, had voted 2 to 1 for Obama in 2008, but in the midterms, broke 56 to 42 percent Republican. They now view the president as a “Wall Street liberal.” These voters have no illusions about Romney, but  given the choice, they will favor the candidate who promises to lower their taxes and reduce the deficit, according to Lux.

Can our political leaders hear the message that the New York jury is sending? Or has the money that rules our political system completely drowned it out?

Contact your representative and let them know we haven’t forgotten all the promises to hold Wall Street accountable for its misdeeds.

 

 

 

 

 

 

 

 

 

About Martin Berg

Martin Berg, WheresOurMoney.org editor, is a veteran journalist.

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