Reports that Credit Suisse (CS) and BNP Paribas (BNPQY) may be hit with criminal charges stunned Wall Street Wednesday as it potentially marks a dramatic shift in how Federal prosecutors look at the financial services industry.
Since the 2008 crisis and up to and including JPMorgan’s (JPM) settlement for enabling Bernie Madoff earlier this year, U.S. regulators have typically sought to settle cases of alleged misdeeds rather than pursue criminal charges. Typically, the big banks pay a fine without having to admit to any wrongdoing and no senior executives have suffered anything more than, perhaps, deferred bonuses.
In his latest book, The Divide, Matt Taibbi set out to examine why Wall Street has been largely immune from prosecution since the 2008 crisis; that’s in contrast to the S&L crisis of the 1980s — when over 800 bankers went to jail — and the accounting scandals of the early 2000s, when high profile CEOs like Enron’s Jeffrey Skilling, WorldCom’s Bernie Ebbers, Tyco’s Dennis Kozlowski and Adelphia’s John Rigas went to jail for various crimes. Here is a direct video link.
See also: Everything is going wrong on Wall Street for a good summary of the latest criminal antics of the ‘cut a cheque and get away with everything’ banksters.