Execs off the hook at S&P
Source: Los Angeles Times
Execs off the hook at S&P
The federal and state lawsuits against S&P are well and good, but no people are on the hook in these cases. What kind of deterrence is that?
You may have heard last week about a couple of big lawsuits brought by federal and state governments, alleging that the credit rating agency Standard & Poor's concocted a fraudulent scheme that contributed to trillions of dollars in investment losses and the cratering of pretty much the entire world financial system.
Those are serious charges, and the federal government's demand for $5 billion in penalties isn't peanuts. Yet there's something bloodless about the lawsuits, for the simple reason that they don't point the finger at any particular person who was responsible for these dastardly doings.
For example, you won't find the name Harold McGraw III anywhere in the court papers. Who?
McGraw was chairman, chief executive and president of McGraw-Hill, S&P's parent company, in the period at issue, 2004 to 2007. (He's still in place today.) Did he profit from S&P's wrongdoing? Let's assume so: he not only owns 10 million company shares but received $44.5 million in compensation over those years, according to corporate disclosures. Did he know or care about what was happening at S&P? One would hope so because it was by far the most profitable domain in his empire, contributing an average of more than 70% of McGraw-Hill's operating profit.
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Read more: Link to sourchttp://www.latimes.com/business/la-fi-hiltzik-20130208,0,1163345.columne
valerief
(53,235 posts)awoke_in_2003
(34,582 posts)the show in DC is just bread and circus to keep us entertained.
L0oniX
(31,493 posts)alfredo
(60,074 posts)Costing them money is costing them what is most dear to them.
Angry Dragon
(36,693 posts)Cirque du So-What
(25,941 posts)incarceration is still far, far worse. I'm too lazy to look it up today, but I've read that when white-collar crime is punished with incarceration, it has an inhibiting influence upon other potential white-collar criminals - more so than any other type of crime, including those that may earn the perpetrator a trip to death row.
Fuddnik
(8,846 posts)They laugh all the way to the bank when the shareholders pick up the tab.
Cirque du So-What
(25,941 posts)as I know the possibility of fines are of no consequence either to the officers of the company or to the shareholders, who made out literally like bandits in spite of the paltry fines that may or may not be imposed.
alfredo
(60,074 posts)elleng
(130,964 posts)RickFromMN
(478 posts)I hate to agree with others, but I believe fines from a civil suit will not deter individuals because I believe the corporation will pay the fines.
I fear the individuals will still get bonuses.
Could individuals be held personally liable for the fines from a civil suit settlement?
I suspect trying to send individuals to jail would be difficult.
I suspect proving individuals were criminally negligent or criminally duplicitous would be very difficult.
alfredo
(60,074 posts)sulphurdunn
(6,891 posts)pay the fine with other peoples money, rather do the crime do the time and pay restitution is apparently the new standard for top tier corporate felons.
Fuddnik
(8,846 posts)To be expected.
BadgerKid
(4,553 posts)Hugin
(33,159 posts)bucolic_frolic
(43,176 posts)Therefore the people in corporations can't be people
and can't be held responsible.
alfredo
(60,074 posts)then left to suffocate on its own blood.
valerief
(53,235 posts)elleng
(130,964 posts)which I don't intend to do; I'm interested in the process, and hope the public can understand what goes into such a case.
The government has to prove its case, and doing so will entail citing and proving specific acts by individuals. We know that S&P is a corporation, made up of individuals who do good and bad acts. The individuals we'd like to see punished must be proven to have been responsible; this is part of the trial process. It will take time. I know that the foundation for this case has been underway for some years.
I expect there are many individuals and individual acts in the developing trial and evidence record, as many acts and decisions occurred during the time period at issue. It would not be rational publicly to name any individuals at this point.
fasttense
(17,301 posts)Then there would be no trial process.
I guess that's reserved for people who don't give them campaign contributions and not their good buddies at S&P. Though there's really no way to tell if Al Quada gave them contribution through a PAC or not.
snot
(10,529 posts)elleng
(130,964 posts)but I do know that this particular matter has been in the works for at least 2-3 years.
triplepoint
(431 posts)Steal a lot, and they make you king.
- Bob Dylan
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Octafish
(55,745 posts)Government officials who let them off the hook are traitors who deserve prison and more.
SDIs is what William K. Black called Standard & Poor's and its cousins -- Systemically Dangerous Institutions:
http://neweconomicperspectives.org/2011/08/nprs-robert-siegel-interviews-william-k.html
Gee. I'm so old I remember when the Justice Department went after crooked banks and such.
dtom67
(634 posts)They will lose because I believe this suit is charging that S & P gave citi and BoA fraudulent rating on their toxic derivatives. On their own worthless junk. They (the banks) didn't know the assets were toxic? They needed SP to tell them? They are probably the ones who bribed S and P to give them the good ratings in the first place.
they are all crooks. Its not worth even pointing it out anymore...
dotymed
(5,610 posts)JFK last night.
The prosecutor was convinced that this was a coup de tat of the American Govt.
He was right.
Theyletmeeatcake2
(348 posts)Then they can go to jail ,stop earning income ,meet Bendover or suffer the death penalty.......this really is a rigged game !