Defaulting banks - where will it stop?

[Peter Lemkin]

A federal judge in Manhattan who oversaw a recent fraud trial against Bank of America has criticized the Obama administration for failing to prosecute a single high-level executive over the financial crisis. In a speech this week, Judge Jed Rakoff honed in on Attorney General Eric Holder's statement that it is difficult to prosecute banks when it seems doing so could hurt the economy. Judge Rakoff said, "To a federal judge, who takes an oath to apply the law equally to rich and to poor, this excuse sometimes labeled the 'too big to jail' excuse is disturbing, frankly, in what it says about the department's apparent disregard for equality under the law." Judge Rakoff noted Holder was referring to the prosecution of institutions, adding that when it comes to prosecuting CEOs "the excuse becomes entirely irrelevant." Last week, New York Federal Reserve president William Dudley also criticized the big banks, saying some have an "apparent lack of respect for law, regulation and the public trust."