Banks continue to draw the lucky Get out of Jail Free card! South Florida Law Blog’sForeclosure Defense Attorney Roy Oppenheim asks: If the government is truly interested in reducing mortgage fraud, why not go after the ones who cause a larger impact on the economy and affect homeowners on a national scale? It seems the banks get the chance card and the little guys go directly to jail.
Last week Citigroup agreed to pay $285 million in a settlement agreement with the Securities and Exchange Commission (S.E.C.). Citigroup to Pay $285 Million to Settle S.E.C. Complaint – NYTimes.com. That’s pocket change for a giant bank that has made over $3.8 billion in profits just last quarter. The defrauded investors contributed to a $ 1 billion portfolio stuffed with high risk mortgage investments. What these unsuspecting investors didn’t know is that Citigroup bet against these investments in hopes that they would lose value. Not only did Citigroup bet against the portfolio, but it was responsible for selecting the mortgage investments that would make up the portfolio.
With all the questionable bank practices that have come to light since the housing market bubble bursts, the S.E.C. has done little to reprimand giants such as Citibank. Not only has the S.E.C or the Justice Department failed to go after the banks, they also have done little to prosecute banking executives who were no doubt involved in criminal activity stemming from the banking crisis. While a bank can’t be sent to jail, the high ranking executives directly responsible for these unethical banking practices should not be able to escape criminal liability. And yet, while the powerful banks and senior executives appear to be above the law, the government has not hesitated in going after individuals who lack powerful political influence on Washington.