Financial Misconduct

January 20, 2012 • Volume 22, Issue 3
Is government action tough enough?
By Kenneth Jost


Raj Rajaratnam, founder of the now-defunct Galleon Group, leaves court on May 11, 2011, after his conviction on fraud and conspiracy charges (AFP/Getty Images/Emmanuel Dunand)
Raj Rajaratnam, founder of the now-defunct Galleon Group, leaves court on May 11, 2011, after his conviction on fraud and conspiracy charges. Prosecutors said he used insider information from Wall Street contacts to make more than $70 million over six years at his once high-flying hedge fund. He was sentenced to 11 years in prison. (AFP/Getty Images/Emmanuel Dunand)

The United States is slowly coming out of the worst financial crisis since the Great Depression, but many Americans want tougher law enforcement against the companies and executives they say created the mess. Four years after the crisis began, no prominent financial executives have been prosecuted. Civil charges were brought against major banks for misleading investors by packaging subprime mortgages with insufficient disclosure, but a federal judge recently rejected a proposed settlement as too lenient. Meanwhile, major mortgage lenders are negotiating a potential multibillion-dollar settlement over allegations of improper home foreclosures. Some states, however, are balking at banks' request for protection from subsequent lawsuits. Many experts say the government has failed to devote adequate resources to prosecuting wrongdoers. But some also acknowledge that certain activities that triggered the crisis were not necessarily illegal.

ISSUE TRACKER for Related Reports
Jan. 20, 2023  The Future of Cryptocurrency
Apr. 06, 2018  Financial Services Deregulation
Sep. 26, 2014  Digital Currency
Oct. 05, 2012  Euro Crisis
Jan. 20, 2012  Financial Misconduct
Jan. 13, 2012  ‘Occupy’ Movement
Oct. 24, 2008  Financial Bailout Updated
Sep. 01, 2000  The Federal Reserve
Jun. 22, 1990  S&L Bailout: Assessing the Impact
Nov. 04, 1988  Behind the S&L Crisis
Apr. 26, 1985  New Era in Banking
Nov. 18, 1983  Bankruptcy's Thriving Business
Aug. 07, 1981  Banking Deregulation
Jul. 19, 1974  Banking Stability
Jul. 17, 1968  Banking Innovations
May 06, 1964  Monetary Policy in Prosperity
May 16, 1940  Revision of the Securities Acts
Feb. 27, 1937  Expansion of Branch Banking
Sep. 03, 1935  The Decline of Commercial Banking
Dec. 11, 1934  Proposals for a Government-Owned Central Bank
Sep. 12, 1934  Bank Reserves and Credit Inflation
Nov. 27, 1933  Bank Credit in Depression and Recovery
Aug. 12, 1933  Closed Banks and Banking Reform
Apr. 04, 1933  Unified Control of Banking
Apr. 09, 1932  The Glass Banking Bill
Mar. 24, 1932  The Guaranty of Bank Deposits
Apr. 17, 1930  The International Bank and the Gold Standard
Feb. 08, 1930  Branch Banking and Chain Banking
Apr. 29, 1929  Mergers of Banking Institutions
Oct. 28, 1927  The Federal Reserve Rate Controversy
May 21, 1927  Labor Banking and Finance Since 1920
Jan. 31, 1924  The Northwestern Bank Failures and the Attack on Treasury Savings Certificates
Dec. 01, 1923  Why State Banks Do Not Join the Federal Reserve System, the Effect on the System and the Issues Involved
Nov. 23, 1923  Branch Bank Controversy
Financial Institutions