At the same time, convicting a low level work in his 20s as the ring leader (https://www.theguardian.com/business/2013/aug/01/fabulous-fa...) is disingenuous.
You can delegate authority, not responsibility.
This fundamental rule of hierarchical organizations is why CEO's need to be held accountable. CEO's are responsible for creating the environment, culture and rules that allow such activities to take place. Failure within an organization on a CEO's watch is that CEO's fault. That's why CEO's deserve high compensation - because the difficulty and risk are so high. If there's no CEO penalty for failing (or worse, breaking the law), than all companies in society suffer.
My entire argument was that someone somewhere along the chain was indeed responsible and it doesnt have to be the CEO. Youre arguing that the CEO cannot be completely responsible, which totally sidesteps the 14 other layers of people responsible and also conveniently ignores the other 14 layers that could be held responsible, investigated, and prosecuted.
Fine, the CEO cant be responsible -- is absolutely no one responsible at all within the organization? If so, how did tens of billions of dollars of profits pour in? How can no one be responsible and yet the companies be so profitable?
Probably has something to do with the upper-crust NY culture where those at the SEC, NY Times, SD-DoJ, and Walls Street are all friends. It is also not surprising that the two individuals on whom most issues were hung were a French trader with a deep french accent and an Egyption desk head at a Swiss bank.
https://www.usatoday.com/story/money/business/2013/08/01/gol...
... like Kareem Serageldin. Who went to prison.
He was literally the ONLY single person who did.
> Mortgage originators that emphasized profit-fueled quantity over loan quality, which resulted in the misreporting of key financial information in 48% of loans securitized by nongovernment agencies;
If 48% of your company's financial transactions were fraudulent, would you expect the CEO to bear responsibility for that? At that point, I'd expect to see a RICO case, or something come out of it.
Meanwhile, that number likely means that the borrowers lied on those same applications. That’s where the fraud actually occurred. And would be easy to prove.
> The Racketeer Influenced and Corrupt Organizations (RICO) Act is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. The RICO Act focuses specifically on racketeering and allows the leaders of a syndicate to be tried for the crimes they ordered others to do or assisted them in doing, closing a perceived loophole. For example, before RICO, a person who instructed someone else to murder could be exempt from prosecution because they did not personally commit the crime.[1]
https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corru...
Quite the opposite you’ll find all manner of examples of the CEO’s enabling things like anti-fraud and risk management teams.
The issue was the implicit organizational pressures between those parts of the companies and the lending/revenue arms.
Making a new class of law that makes those implicit conflicts a criminal responsibility of company CEOs seems extremely fraught, but more importantly those laws didn’t exist at the time.
For it to be RICO, no you do not need to prove that. You need to prove more. You'd need to prove that the "Wall Street CEO" told someone to commit mortgage fraud, and then used the proceeds of that mortgage fraud to take control of an enterprise (which would presumably have to exclude the company of which he is CEO).
(https://www.law.cornell.edu/uscode/text/18/1962, for reference)
More importantly, there's a specific sequence of connections between the original predicate acts of racketeering and the control of the enterprise that has to be established for it to happen. 18 USC §1962 has the gory details, but I just don't see how the CEO can possibly be guilty of RICO.
As Ken White says, it's never RICO: https://www.popehat.com/2016/06/14/lawsplainer-its-not-rico-...
We created RICO to convict the Mafia. Not sure why we can't create a new type of crime to hold financial companies responsible for massive fraud.
I mean - we already have Securities Fraud - for which bank CEOs should be held accountable. I'm not sure how they escaped from that.
https://themreport.com/daily-dose/12-08-2020/the-role-of-len...