The New York Times has a detailed account of the decision not to prosecute Wall Street. Detailing accounts of what it terms were "contentious debates" within the SEC, it suggests a significant battle was going on between those that wanted to prosecute Wall Street and those who did not think there was enough evidence.
As a former prosecutor I have one reaction - the SEC had no balls. Either that, or there was direction NOT to prosecute Wall Street.
It really is as simple as that, folks. I have had to make a decision on whether to move forward with a prosecution. In any prosecutor's career you find cases that are problematic. Not every case is a slam dunk.
In those cases there are times where you have to try to prosecute BECAUSE ANY IDEA OF JUSTICE DEMANDS IT. You might lose, and in doing so, you waste the state's resources and you personally have to deal with failure (something many prosecutors will go to great lengths to avoid). But there are cases where you simply have to move forward.
God knows these cases were ones that need to have been tried.
For example, rape cases can be tough. And I can tell you one thing after reading this article - I wouldn't want these people making a decision on a rape case where the evidence was shaky.
The article is excerpted below - and it should be read. It is clear in my opinion that staff lawyers working for the SEC wanted to try these cases. And the chief counsel of the SEC didn't have the guts to try them.
Wall Street’s top regulator, sifting through the wreckage of the mortgage crisis, was weighing enforcement actions last year against several large financial companies.
But then the regulator, the Securities and Exchange Commission, decided in some prominent cases to quietly back down.
snip....
..in the cases of Goldman Sachs, Wells Fargo and other banks similarly suspected of overstating the quality of mortgage securities, Mr. Khuzami sided with those who thought the cases posed too steep a challenge.
Some of those decisions traced to concerns about the evidence, with senior officials questioning whether the investigators’ devotion to the cases had colored their judgments. The S.E.C. had the high hurdle of proving that the companies had committed fraud, needing to show that they had “materially” misled investors.
Other times, the decisions came down to dollars and cents.
snip...
But to some S.E.C. investigators, the case closings suggested a shift within the agency toward unnecessary caution. The change coincided, they said, with the departure in early 2012 of Lorin L. Reisner, who was known for his aggressive streak as Mr. Khuzami’s deputy.
http://dealbook.nytimes.com/...
9:08 AM PT: I can't help think back to the first case of my career - it involved Michael Milken of Drexel Burnham. It was as expensive as hell for the US Attorney to try that case, and the best lawyers in the city were on the other side. I hate Giuliani - but in retrospect I wish he were involved in these cases.