Why Have No Bankers Gone to Jail?
By Daily Bell Staff - January 08, 2016

Former money-market trader Paul Thompson was at his well kept brick-and-tile Dalkeith home, a couple of blocks from Perth's Swan River, last Thursday when Australian Federal Police officers came to arrest him. The October 22 arrest was not a complete surprise, nor was it entirely unexpected. Thompson didn't know an arrest warrant had been issued and he wasn't told police were on their way. He spent the past week in Hakea Prison, south of Perth, awaiting extradition proceedings to the United States, where the charges have been filed. – Financial Review

Dominant Social Theme: US justice is always served.

Free-Market Analysis: One long-running financial meme of the mainstream media poses the question, why haven't bankers gone to jail for helping to create the subprime crisis and subsequent Great Recession?

Back in 2013, it looked like that question would be answered by action when Benjamin Wagner, U.S. attorney for the Eastern District of California, targeted JPMorgan Chase.

Wagner wrote a report on how JPMorgan Chase marketed inappropriate packages of securitized mortgages to investors. But instead of going to court, the Justice Department extracted a huge financial settlement.

In November 2013, JPMorgan Chase decided to accept a $13 billion DOJ offer. Eric Holder claimed the settlement showed Wall Street could be held accountable.

But perhaps not. The corporation itself took the blame, not individuals. Corporate personhood is a big barrier when it comes to prosecuting individuals in large corporations. Instead, the deep pockets of large entities prove a tempting alternative target.

The combination of prosecutorial difficulty and the available prize of corporate treasure combine to create a federal bias toward seeking fines rather than corporate accountability.

Recently, the US government pursued the extradition of former money-market trader Paul Thompson (see article excerpt, above). He was arrested at his home in Dalkeith, Australia.

Thompson is being extradited to the US on charges of manipulating the London Interbank Offered Rate, or Libor. The illegal transactions took place in Singapore.

While the US will not prosecute bankers at home, it is willing to arrest someone in Australia who allegedly perpetrated a crime in Singapore targeting a British financial facility (Libor).

In fact, the US seems to be trying to project the power of its justice system abroad whenever possible. Prosecutions aren't important but a worldwide prosecutorial reach seems to be.

The FBI, a constitutionally dubious facility to begin with, now has offices in over 100 countries abroad. The US has become the tax policeman of the world, demanding that banks in other countries turn over revenue and information about US accountholders.

As a result, US travelers abroad are increasingly disenfranchised and find it hard to make simple monetary transactions, let alone do business in foreign countries.

At home, the US justice system increasingly provokes questions and criticism. Prisoners are black well in excess of the ratio of African-Americans to whites in the larger population.

Increasingly, prisons have been "privatized" – turned over to the private sector to be run at a profit. This encourages municipalities to incarcerate people to fulfill contractual clauses mandating that the prison population be kept at a certain level.

The US prison system, like systems of this sort everywhere, suffers from a considerable number of falsely accused and convicted individuals. No one knows how many, but the discovery and application of DNA analysis has helped free numerous innocent people.

It is unfortunate that prison/justice reform discussions often revolve around efficiency and cost rather than more fundamental issues. One such example of how easily the conversation can "go off the rails" can be found in a recent UK Telegraph article entitled, "We must reform our justice system."

Here's how it begins:

For at least 20 years, successive governments have promised to reform and modernise Britain's criminal courts so that they dispense justice more efficiently, there are fewer delays, and victims do not have to rub shoulders with perpetrators.

So far, none of the attempts at reform has succeeded. As we report today, when Sir Paul Stephenson, the former Commissioner of the Metropolitan Police, observed the proceedings at Westminster Magistrates' Court with this newspaper on one day last week, he concluded that the courts are "slow, bureaucratic and hugely frustrating".

No doubt British jurisprudence suffers from some of the same problems as the US. But surely the fundamental issues have far more to do with the basic assumptions of the system than with its efficacy.

In fact, a bad system that is inefficient is probably preferable to a bad system that is efficient when it comes to "justice."

Anyone exposed to justice in either Britain or the US knows that it can be both capricious and arbitrary. It is nothing like what is portrayed in movies and on TV.

The fundamental problem of modern justice is that it has become the monopoly purview of the government. The state is inefficient in the best of times. But give the state unlimited power to punish and the monopoly power to do so and you have a recipe for disaster.

Over time, we've predicted, people will be increasingly willing to entertain various forms of private – non state – justice of the sort that has existed for millennia.

Alternatively, and even more importantly, people can take "human action" to avoid getting caught up in the criminal justice system either as a defendant or victim.

The incarceration of a criminal likely does your pocketbook little good, as compensation may be difficult to come by. Best to keep your wits about you and educate yourself about both white- and blue-collar scams.

After Thoughts

Additionally, try to learn as much as you can about the financial system under which you live. In some ways it is government itself that exploits people even more than the most accomplished criminal. Take nothing for granted. Caveat emptor.

You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.

When you subscribe to The Daily Bell, you also get a free guide:

How to Craft a Two Year Plan to Reclaim 3 Specific Freedoms.

This guide will show you exactly how to plan your next two years to build the free life of your dreams. It’s not as hard as you think…

Identify. Plan. Execute.

Yes, deliver THE DAILY BELL to my inbox!


Your $50 Ticket to the “$100 Billion Pot Stock Bonanza”

The $100 billion marijuana industry is dominated by penny stocks…

With legalization sweeping the country, these penny stocks have already begun skyrocketing in price…

Take action TODAY, and you have a once-in-a-generation opportunity to turn a tiny $50 investment into an absolute fortune.

Click here to find out how.

Biggest Currency Reboot in 100 Years?
In less than 3 months, the biggest reboot to the U.S. dollar in 100 years could sweep America.
It has to do with a quiet potential government agreement you’ve never heard about.

  • Danny B

    About 1,000 people were jailed as a result of the S&L meltdown. Regulatory capture ended that threat. Power corrupts and morality is not a natural attribute to corrupted people. Douglas MacArthur, et al, have made it very clear that trade and commerce can’t survive very long without morality.
    Immorality at the top ensures that general corruption filters down to the rest.

    Corruption becomes rampant in the imperial court, and the empire begins to enter decline and instability.
    (Indeed, Bastiat showed that corruption at the top leads to lawlessness among the people.)

    Runaway inequality – in turn – leads to the fall of empires … through unrest or revolution.
    Indeed, inequality was one of the main reasons for the fall of the Roman Empire … and inequality in America is much worse than in Ancient Rome. In fact, inequality in America today is twice as bad as in ancient Rome , worse than it was in in Tsarist Russia

    Many States are dancing as fast as they can to stave off revolution. Attitudes have changed and people are recognising the source of corruption;
    The music is fading and the dance is soon to end. Prosperity was the glue that held it all together. Credit was the vehicle that made a small amount of wealth appear like a large amount.

    • Heywood Jablome

      The Roman empire did not fall because of inequality, it fell because of the economics it practiced and the debasement of the monetary units of the day, equality is a myth and the one of the darling principles of the socialist types, to quote Rothbard

      The diversity of mankind is a basic
      postulate of our knowledge of human beings. But if mankind is diverse and
      individuated, then how can anyone propose equality as an ideal? Every year,
      scholars hold Conferences on Equality and call for greater equality, and no one
      challenges the basic tenet. But what justification can equality find in the
      nature of man? If each individual is unique, how else can he be made ‘equal’ to
      others than by destroying most of what is human in him and reducing human
      society to the mindless uniformity of the ant heap?”

      – MurrayN. Rothbard

      Equality is anathema to free market action, since individuals will work as much as they desire to achieve the results they are happy with, some will work more and some less, inequality is always the result, when the government interferes and creates artificial conditions and paradigms which skew a free market, and favoritism is practiced towards certain parties over others, then inequality is created which is not natural.

      • Danny B

        With a screen name like yours, you can’t expect anybody to take you seriously

        • bionic mosquito

          Danny B, if enlightenment is an important objective for you, you might consider the words instead of the screen name.

          Rome fell because of an overextended empire that was paid for by a long-term debasement of the money. Eventually, many gave themselves over to be slaves of the so-called barbarians instead of remaining as citizens of a collapsed civilization.

      • Webforager

        The idea of equality has become perverted. Equality implies that no individual may command another individual without consent and is a founding principle for the right of association, e.g. “governments derive their just powers from the consent of the governed”. The popular idea of equality is a comparison of ability which leads to wonky conclusions and is used to justify intrusive behaviors.

  • LawrenceNeal

    No one has been held personally responsible for their actions because the banking cartels OWN the politicians that manage the so-called ‘government’. As was stated in another DB article, bankers are not moral or trustworthy. They break laws and regulations, defraud account holders, and when caught, pay a percentage of their illegal gains and chalk it up to the costs of doing business.

  • gamathers

    I like most of the articles on the “Daily Bell”, however this one seems to ramble and not stick to the original point. That bankers have gotten off “scot free”

    • Alberto Dietz

      Pitchforks anyone?

      • Castle_Nut

        Guillotines are more efficient.

  • swemson

    Why Have No Bankers Gone to Jail? For the same reason that the tiger that attacked Roy wasn’t put down….

    Carter and Clinton forced the bankers to make bad loans, and then the bankers did whatever they felt they had to do in order to survive…..

    The tiger was just being a tiger…. the bankers were just being bankers…. Their only ethical alternative was to close their banks down….


  • Heywood Jablome

    The aggrieved parties should be compensated by the entities that have perpetrated this fiscal malfeasance, and the individuals who have passed approval in house on these activities should be fined to the point of bankruptcy, and those funds should all go to the individuals who suffered the most, toadies like Holder and his successor, are afraid of the financial services sector because they have been led to believe that the sky will fall if some of these entities go broke. Jamie Dimon, Blankfein, Rubin, et al, should be prosecuted, and turned into paupers where their perfidy has cost so many others everything. The attitude which seems to prevail currently is that the policing all over the globe, will be a panacea for the lack of action at home, and why should the assets which are the result of the fines go to the government, when they suffered the least, but facilitated the conditions and bailouts again on the taxpayers.

  • Dimitri Ledkovsky

    Shucks! I was looking forward to an article about how cleptomaniacal banksters might replace African Americans behind bars, some of whom might be in the slammer indefinitely for as little as an attempt to sell 1/4 oz. of cannabis. But one thing is for sure: when the Big Crash is upon us, “Rome is burning” and across the board bank holidays are declared, the banking elite will make itself scarce and mute.

  • Samarami

    “…In some ways it is government itself that exploits people

    even more than the most accomplished criminal….”

    Whoduv thunk it??? Sam

  • Wrusssr

    When a government agency brings a non-government financial entity–say a bank–into a federal court, that agency, the lawyers representing that agency (contract or full-time), and the judge who’s going to rule on the case involving that agency, all receive their paychecks from the same ‘treasury’.

    Thus it is difficult, if not downright foolish, to expect a federal court to rule against itself. Or, to ‘bite the hand’ that’s signing their paychecks. Yet, some appearance of justice has to be produced for public consumption in order for the scam to continue. Which is not a problem when the “wrong-doer” in a federal court is the non-government entity that controls the source for the federal court’s paychecks.

    Enter the “we-showed-them-who’s-boss” giga-fines coming out of the federal courts.

    Which brings to mind an updated application of an ancient Alibabbic saying: “When one thief steals from another thief and is caught, he is pardoned for a thousand years providing he shares in the loot. And while billions in fines sounds breath-taking to the uninformed, it’s really chump change compared to the enormity of the theft rolling off the wrong-doer’s money presses.

    Another good article. Accurate, IMO.

  • Sam Fox

    Perhaps few bankers are in jail is the same reason Hillary still walks around. Big money & connections.

  • MetaCynic

    In the private sector, corporate personhood shields bankers from personal accountability for mortgage securities fraud, while in the public sector sovereign immunity likewise shields government employees from prosecution for crimes against people. In both cases, if punishment is meted out at all, it is an institution that is made to cough up money as restitution for a wrong. In the private sector shareholders get screwed, and in the public sector taxpayers are made to suffer. In both cases financial punishment is at best a weak deterrent to crime by an individual, because the sting of the punishment gets diffused among the many members of a third party who end up paying for the individual’s wrongdoing.

  • Q46

    The question is why has nobody in Government gone to gaol? If a party gets out of hand and ends up in a drunken brawl, you blame the party organisers not the bar staff.

  • Jim Johnson

    Neighborhood arbitrated decisions. It must all start there, and our whole system forced to respect those initial decisions. Want Justice? Be a good neighbor. Get to know them, and they you.

  • Demonocracy

    This article seems to divide itself into two topics, “the oligarchy who are above the law” and “the Prison Industrial Complex”.

    1) America doesn’t jail bankers because AmeriKa is a lawless nation, at least for the ruling oligarchy in bed with the government. Iceland is the very opposite.

    The man who walks out the front door of the bank with a shotgun and $10,000 is an armed robber and recieves 20 years to life. The banker who walks out the back door with $1,000,000,000 is called a shrewd business man and recieves bonuses and is promoted. Only in AmeriKa is theft considered capitalism.

    What we are seeing today is more closely defined as “feudalism”, rule by the rich.

    And as far as I can tell the Amerikan government wont prosecute ANY corporation under corporate personhood, because there is a pro-corporate bias. AmeriKa is a corporation itself under the Act of 1871. America is not a country, it is a corporation. Why would it prosecute it’s buddies of another corporation?

    2) The Prison Industrial Complex: For companies like this to survive and thrive either conditions will have to become more deplorable and more medieval or laws will have to become harsher, crueler and more reminiscent of offenses for the AmeriKan Gulag – such as jokes about officials punishable by imprisonment. Then their is the motive for almost free prison labor being exploited by corporations.

    Even Israel found the practice of private prisons to be quite evil and perverse.

    In November 2009, an expanded panel of 9 judges of the Israeli Supreme Court ruled that privately run prisons are unconstitutional,
    finding that for the State to transfer authority for managing the prison to a private contractor whose aim is monetary profit would
    severely violate the prisoners’ basic human rights to dignity and freedom.

  • John

    “Why Have No Bankers Gone to Jail?”

    But They are Seizing the Ranches & Throwing the Ranchers in Prison on Trumped Up Terrorism Charges.

    Two Tier System of Justice – One for Management – One for the Working Man.

  • olde reb

    “Why Have No Bankers Gone to Jail?” you
    ask. Easy question; the bankers control the governmrnt.

    John Perkins in CONFSSIONS OF EHM
    documented their control of foreign nations using the CIA, IMF, WB,
    U.S. military for the economic benefit of the collective profit of
    their “social” group Council on Foreign Relations. ZerioHedge
    docoumented how much Wall Street had to pay each congress critter to
    get their approval of TPP. Goldman Sachs internal control of the US
    Treasury and State Department has been documented. The AG is well

    The AG will not even investigate the embezzlement by the Federal Reserve’s use of the
    disbursement of funds from auctions of Treasury securities
    exclusively controlled by the FRBNY. Ref
    HEIST article.

  • rahrog

    Whose zoomin who? People who don’t stand up to thieves should expect to have their property stolen. And their liberty. And their lives.

  • Perhaps bankers have not been prosecuted over the creation of the sub-prime house loan black-hole because the agenda was originally forced down the throats of the banks by ‘the state’. So if that truth came to the defence of charges against individuals so too could criminal charges come to the political individuals who originated the agenda. And if the political drivers of the policy, who forced it onto the banks, were found-out they in turn may point to where the policy really originated (and the manipulative financial decisiveness truly behind the agenda – to put the governments of the world (human tax-farms) into ever deeper debt for the human herd tax-slaves to pay without end).

  • Castle_Nut

    If the Nazis had incorporated in the US, maybe they could have avoided the Nuremberg Trials.

    • Truther

      they did and they have… where do you think all the scientists and many of the other high officials ended up? Yes many went to Argentina and Brazil, but the vast majority ended up with new identities and jobs working for guess who?…. the US Government, NASA and other Dark Projects… time to start reading your ‘alternative’ history.

  • Castle_Nut

    The answer is simple. Banksters own the Executive branch. During each Presidential election, JP Morgan and Goldman Sachs donate over $1M to each candidate. They don’t care who wins, they own both of them. If they don’t play ball during their presidency, they don’t get another bag of cash when they run for re-election, but their opposition does. They effectively buy immunity for whatever they do for the next 4 years.