Yesterday, three Credit Suisse bankers were charged with fraud by the U.S. Attorney for the S.D.N.Y., Preet S. Bharara, for inflating value of mortgage bonds during financial crisis to inflate their own bonuses. Significantly, two of the three traders pleaded guilty yesterday. As a result, nobody can truthfully utter the line “there have been no Wall Street bankster convictions!” Of course, Wall Street banks like Goldman and Citibank had also entered into settlements with the SEC prior to this, but as a routine practice in such settlements, the banks didn’t admit to any wrongdoing. These successful prosecutions of the Credit Suisse traders are likely to lead to more convictions, as the two who plead guilty are cooperating with the U.S. Attorney. Other investigations are also pending against the Bank of New York Mellon and Deutsche Bank.
I’m sure there will be some critics who will characterize these prosecutions as too little, too late, and remain convinced that this administration simply doesn’t care to enforce criminal laws against the big Wall Street banks. Wrong. Mr. Bharara spoke to this point yesterday, “The number of prosecutions is not a function of resources, effort, commitment or courage. It is a function of the laws, the facts, and the painstaking nature of these investigations.”
He’s exactly right.
