Today’s chart requires very little explanation.
Criminal fraud prosecutions of financial institutions have been on the decline since 1999.
The Global Financial Crisis revealed piles of dirt under financial institutions’ rugs… No-doc ‘liar’ loans pushed by mortgage companies… securitized bundles of subprime mortgages (AAA-rated, somehow!) pushed by investment banks… Insider trading – among hedge fund managers, and members of Congress (maybe).
But instead of punishing institutions responsible for real, past transgressions… we merely heard tough talk aimed at future transgressors.
C-suite executives got grilled on Capital Hill. Ratings agencies were publically ridiculed. Congress policed itself through the STOCK Act.
Yet we saw no increase in criminal fraud prosecutions. Why?
Maybe it’s the size of the problem.
Is this a case of ‘too big to jail!?’