The Financial Crisis, which began in the United States on Wall Street in the fall of 2008, cost the global economy trillions of dollars, caused millions of people to lose their jobs, homes, life and retirement savings, and resulted in the collapse or taxpayer-funded government bailout of several century-old, storied financial institutions. Irresponsible risk-taking, fraudulent mortgage and lending practices, and misrepresentations around increasingly complex products are among the many theories that have been put forth as to what caused the Financial Crisis. Importantly, there are numerous state and federal statutes on the books prohibiting and criminalizing such activity. To put away those who engaged in such criminal behavior, Wall Street-focused prosecutors just had to establish that they did so with the requisite criminal intent, or mens rea. Yet, not a single high-level Wall Street executive has been prosecuted criminally for their role in bringing about the worst crisis since the Great Depression. In the rather blunt words of a former Senate investigator: “Everything’s fucked up, and nobody goes to jail.”
This Note argues that the current enforcement framework, whereby cozy financial regulators and prosecutors are content with levying civil fines against financial institutions and allowing the bad actors therein to remain insulated, is insufficient. A key underlying premise throughout this Note is that the identification and prosecution of bad actors in the financial markets are “vital to the American economic engine.” This premise is especially true at this juncture in American history where, due to the interconnectedness and complexity of modern finance, a single harm or instance of wrongdoing can destabilize the entire global market.
This Note, therefore, suggests that prosecutors overseeing the financial services industry should increasingly rely on whistleblowers from within a particular institution or the industry as a whole in order to establish the seemingly elusive element of criminal intent in these cases of alleged individual criminal financial wrongdoing.
Zales, Joseph L.
"$22 Trillion Lost, Zero Wall Street Executives Jailed: Prosecutors Should Utilize Whistleblowers to Establish Criminal Intent,"
Notre Dame Journal of International & Comparative Law:
1, Article 13.
Available at: http://scholarship.law.nd.edu/ndjicl/vol6/iss1/13