![handle is hein.journals/crmlsc61 and id is 1 raw text is: Crime Law Soc Change (2014) 61:1-13
DOI 10.1007/s10611-013-9476-4
Too big to fail, too powerful to jail? On the absence
of criminal prosecutions after the 2008
financial meltdown
Henry N. Pontell - William K. Black - Gilbert Geis
Published online: 29 August 2013
O Springer Science+Business Media Dordrecht 2013
Abstract Various explanations have been offered regarding the causes of the current
global economic crisis that was spawned by the collapse ofmortgage-based securities in the
U.S. that were sold world-wide and that contained toxic assets comprised of subprime
loans. There is ample evidence that such loans were originated through fraud. Firms
recorded huge profits, and executives were awarded large bonuses even though some
had led their companies into bankruptcy and plunged both the U.S. and global economies
into the greatest recession since the Great Depression. This paper assesses the reasons why
there have been no major prosecutions to date, and compares the U.S. government's
response to that in the savings and loan crisis. It analyzes the influence of large financial
institutions on lawmaking, regulation, and the allocation of enforcement resources, the
continued general lack of understanding of financial fraud including control fraud, and
problems related to the higher status and power of potential defendants.
The global meltdown that began in 2008 was influenced by a number of factors, including
flawed financial policies, law-breaking, greed, irresponsibility, and not an inconsiderable
amount of concerted ignorance and outright stupidity. To date, the greatest attention
regarding that criminality has focused on the $65 billion Ponzi scheme perpetrated by
Bernard Madoff, a scam that resembled tactics of con men, not big time corporate financiers
[33, 36]. Prototypical corporate frauds such as those perpetrated by Wall Street behemoths
American International Group (AIG), Countrywide, Lehman Brothers and Bear Stems
received much less attention [1, 20, 24, 25]. These companies, had balance sheets that were
saturated with securities containing toxic subprime mortgages. They collapsed, were
bought by competitors, or were bailed out by the federal government with huge infusions
Revised version of paper presented at the 16th World Congress of the International Society of Criminology,
Kobe, August 8, 2011.
H. N. Pontell (E) - G. Geis
Department of Criminology Law and Society, University of California, Irvine, CA, USA
e-mail: pontell@uci.edu
W. K. Black
School of Law, University of Missouri, Kansas City, MO, USA
4L Springer](ViewImageLocal?handle=hein.journals/crmlsc61&div=1&collection=&method=preview&ext=.png&size=3)
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