Why No Bankers Go to Jail

Criminal prosecutions of top financial executives are becoming a lost battle for Nigeria’s cash-strapped anti-corruption agencies. They are not alone. The Criminal Justice System in the US has also come under attack for failing to bring bankers to book. The editor on economic, financial, regulatory, and business issues for Bloomberg View, Paula Dwyer, in this article inspired by outspoken U.S. District Court judge, Jed Rakoff, discusses why federal prosecutors are beefing up their statistics with smaller, easier cases and avoiding the years-long financial fraud probes that may turn up nothing.

At a recent meeting of New York City securities lawyers, Jed Rakoff did what he does best: challenge Establishment Thinking. “While the economy has slowly improved, there are still millions of Americans leading lives of quiet desperation — without jobs, without resources, without hope.” Then he asked: Who is to blame?

Rakoff is the iconoclastic U.S. District Court judge who’s been at the heart of some of the most significant trials stemming from the financial crisis. And what he really wanted to know is why more there haven’t been more criminal prosecutions of top financial executives (the very ones who, not coincidentally, made many of the people in his audience quite wealthy). To Rakoff the answer, clearly, is gun-shy federal prosecutors.