Cleaning Up the Financial Crisis of 2008: Prosecutorial Discretion or Prosecutorial Abdication? - Borden & Reiss, Brooklyn School of Law

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Cleaning Up the Financial Crisis of 2008: Prosecutorial Discretion or Prosecutorial Abdication? – Borden & Reiss, Brooklyn School of Law

Cleaning Up the Financial Crisis of 2008: Prosecutorial Discretion or Prosecutorial Abdication? – Borden & Reiss, Brooklyn School of Law

Cleaning Up the Financial Crisis of 2008: Prosecutorial Discretion or Prosecutorial Abdication?

David J. Reiss, Brooklyn Law School
Bradley T. Borden, Brooklyn Law School

Abstract

When finance professionals play fast and loose, big problems result. Indeed, the 2008 Financial Crisis resulted from people in the real estate finance industry ignoring underwriting criteria for mortgages and structural finance products. That malfeasance filled the financial markets with mortgage-backed securities (MBS) that were worth a small fraction of the amount issuers represented to investors. It also loaded borrowers with liabilities that they never had a chance to satisfy.

Despite all the wrongdoing that caused the financial crisis, prosecutors have been slow to bring charges against individuals who originated bad loans, pooled bad mortgages, and sold bad MBS. Unfortunately, the lack of individual prosecutions signals to participants of the financial industry that wrongdoing not only will go unpunished but will likely even be rewarded financially. Without criminal liability, we risk a repeat of the type of conduct that brought us to the edge of financial ruin.

[ipaper docId=131508596 access_key=key-4d2i0fb4xp4br5twe8b height=600 width=600 /]

Suggested Citation

David J. Reiss and Bradley T. Bordenq. “Cleaning Up the Financial Crisis of 2008: Prosecutorial Discretion or Prosecutorial Abdication?” BNA Criminal Law Reporter (2013).
Available at: http://works.bepress.com/david_reiss/61

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