By Rick Gould, CPA, JD
The Securities & Exchange Commission and the Financial Industry Regulatory Authority (FINRA) have imposed massive changes, licensing requirements and continuing education accountabilities on financial industry professionals.
What amazes me, though, is how little has been accomplished by the Justice Department in prosecuting those guilty of corporate abuses for personal gain since the debacles of Enron, Worldcom, Tyco and others of the early part of this decade. Only a select few have gone to prison.
Are today’s cases more complex than Enron or Worldcom or Tycos? And we were successful in convicting Enron’s Ken Lay, Chairman, Jeff Skilling, CEO and Andrew Fastow, CFO? We convicted Bernie Ebbers, CEO of Worldcom and Dennis Kozlowski, CEO of Tycos. All are serving prison terms, other than Mr. Lay whose premature death, before sentencing precluded the humiliation of prison.
And Bernie Madoff got his rightful fate, a 150 year sentence, after turning upside down the lives and financial stability of thousands of hardworking individuals. The bankruptcy trustee, Irving Picard, is committed to recovering, via “Clawback”, the financial gain of many feeder firms for Madoff, as well as Madoff relatives, employees, his CPA and others who gained from this debacle.
Now the Justice Department, led by Attorney General Eric Holder, is increasing major efforts against “Insider Trading” abuses. Public company executives, hedge fund partners and managers are all subject to criminal investigations.
I ask where are the investigations and prosecution to those responsible for the financial crisis that caused the worst recession since the great depression?
What about those from Lehman, Bear Sterns, Merril Lynch, Citigroup, AIG or the many mortgage companies that participated and benefited from the Sub-Prime Meltdown? The settlement with Countrywide’s Angelo Mazilo was a joke in relation to how he personally benefited. And why, if the team is as high quality as professed, is it taking so long?
Why aren’t those executives that are responsible for the mess created being held accountable? Why are they embellishing the position that corporate crime pays?
Isn’t corporate fraud as serious a crime as theft or robbery of a store or a home or a business?
The financial crisis of the past few years needs to result in more prison terms, more very heavy fines, more accountability to restore the trust and confidence of the American public. Throwing the book at those responsible will further that vote of confidence in support of the SEC, FINRA and our Justice Department.