Should bankers face mandatory jail sentences when they commit fraud? | The Tylt

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Should bankers face mandatory jail sentences when they commit fraud?
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Most of the time, banks are able to avoid criminal charges by reaching a settlement with the Department of Justice. 

In many of these cases, the banks entered into what are called deferred prosecution agreements, with the DoJ effectively saying, “We have what we need to issue indictments right now, but if you make certain reforms, and pay a fine, we’ll table and eventually drop the charges.” Each scandal is different, but they share one commonality, other than the massive sums of money involved: “In all those cases I’ve listed, not one single individual spent a single day in jail for the criminal activity that justified those monetary penalties,” said Gurulé. And as he pointed out, full-blown investigations have benefits beyond simple punishment and deterrence: Authorities with subpoena powers can uncover important details about exactly who played the biggest roles in orchestrating and perpetuating a pattern of illegal activity, helping regulators and others prevent repeat acts in the future.

However, it's not a guarantee that a criminal investigation would lead to jailing executives. 

The question of why the feds basically never target individuals in these cases is complicated. It would seem like an easy political, moral, and social-norm win: Punish the individuals who committed huge financial crimes, making it clear that such conduct is unacceptable and can’t be paid for with cash alone. But as one former government official who had been involved in money-laundering cases told me in 2012, sometimes building a strong case against individuals can be difficult given how big and complicated banks are, and sometimes, even when there is evidence, that evidence points not to the C-suite suits, but middle-manager types. It may be, he explained, that at the start of an investigation, there’s an appetite among investigators for convictions, but that a few months or a year in, the government realizes that its most favorable bang-for-the-buck outcome is the announcement of a rich-seeming deferred prosecution deal.
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When banks commit fraud, it's not always clear that they've done something illegal. Spending resources to pursue criminal charges, especially when cases tend to drag out, isn't worth it when you can settle and force companies to make the proper reforms. 

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Iceland is held as an example of a country that got it right by jailing bankers after the financial crisis. However, the country still faces issues of fraud and financial corruption. Sending bankers to jail sent a message, but it's not stopping people from engaging in shady deals. 

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Should bankers face mandatory jail sentences when they commit fraud?
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