"U.S. judge asks: Why haven't the financial executives been prosecuted?"

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As the five-year statute of limitations approaches for the wrongdoing that bequeathed us the Great Recession, the question of why no high-level executives have been prosecuted becomes more urgent.

"Companies do not commit crimes," Rakoff observes; "only their agents do...So why not prosecute the agent who actually committed the crime?" He's witheringly skeptical of prosecutions of corporations, which usually yield some nominal fines and an agreement that the company set up an internal "compliance" department. "The future deterrent value of successfully prosecuting individuals far outweighs the prophylactic benefits of imposing internal compliance measures that are often little more than window-dressing."

Rakoff's at his best when analyzing why the government has stopped pursuing individuals and taken the easy route of settling with corporations. He notes that this is a recent trend: In the 1980s, the government convicted more than 800 individuals, including top executives, in the savings-and-loan scandal, and a decade later successfully prosecuted the top executives of Enron and WorldCom.

He dismisses the Department of Justice rationale that proving "intent" to defraud in the financial crisis cases is difficult: There's plenty of evidence in the public record that banking executives knew the mortgage securities they were hawking as AAA were junk.

http://www.latimes.com/business/hiltzik/la-fi-mh-us-judge-20131230,0,4386369.story#axzz2ozbPeYn7