Plain Talk: No more playing footsie with banksters?

2013-02-04T06:00:00Z Plain Talk: No more playing footsie with banksters?DAVE ZWEIFEL | The Capital Times editor emeritus | dzweifel@madison.com madison.com

President Obama’s pick of Mary Jo White, a former white collar crime prosecutor, to head the Securities and Exchange Commission is getting lots of high fives from folks who believe it’s time the country got tough with the people who bend the financial rules to pad their own pockets.

Gretchen Morgenson, the crack business reporter and columnist for the New York Times, says the president’s pick of White is sending a message that the government is finally going to stop playing footsie with the “banksters” and others who for too long now have been taking advantage of lax oversight and getting away with it.

Very few, for instance, have paid a real price for the illegal manipulation that eventually led to the economic crash of 2008.

That’s been because the SEC has routinely let companies and individuals settle cases against them without admitting to its findings. Morgenson points out this lets “bad actors” pretend that they’ve done nothing wrong and it also makes it hard for investors who have been harmed to mount successful lawsuits against them.

You read about this practice all the time. Some huge international corporation will settle a suit for a hefty sum of money — a sum that probably makes but a small dent in its overall bottom line — but at the same time claims that it doesn’t admit to doing anything wrong.

Government regulators contend that this is the best way to avoid lengthy and costly trials, plus it’s better to at least get some money through a fine rather than risk losing a trial.

The problem, though, is the irresponsible corporation gets off with what amounts to a wrist slap, and since the fines can be written off and their cost passed on to shareholders, no one (except shareholders) suffers any real punishment. Wall Street money manipulators who caused the financial meltdown of the late 2000s, which cost millions of Americans their jobs and often their homes and savings, never wound up being punished.

Morgenson believes this will change under White, who made it a priority when she was U.S. attorney for the southern district of New York to require admissions from defendants in civil fraud cases. The man she hired to litigate those cases, Preet Bharara, believes strongly that those who have committed wrongdoing have a responsibility to tell the truth.

“They should have to admit that they engaged in bad conduct for all the world to see,” he adds.

From all indications, Mary Jo White still feels that way. Many Americans will say it’s about time.

Dave Zweifel is editor emeritus of The Capital Times. dzweifel@madison.com

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(7) Comments

  1. Dode
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    Dode - February 05, 2013 6:39 pm
    Present 0bama is going after his biggest donors? I doubt it. Nice try, Davey.
  2. JoeBiteme
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    JoeBiteme - February 05, 2013 6:34 pm
    The SEC was watching porn while Bernie Madoff with everyone's money. This lady has her work cut out.
  3. Hogzilla
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    Hogzilla - February 04, 2013 7:22 pm
    Dave must live on another planet. How is he reconciling this in his mind?

    Mary Jo White joined the law firm of Debevoise & Plimpton and built up a lucrative practice defending, among others, senior Wall Street executives. Her clients included Kenneth Lewis, the former chairman and chief executive of Bank of America, and John Mack, who held the top job at Morgan Stanley.

    This is what they refer to as letting the fox guard the hen house.

    Seriously Zweifel, it's time for you to retire, this type of "reporting" is actually hurting your readers because you are misinforming them.
  4. Mr Mellow
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    Mr Mellow - February 04, 2013 5:52 pm
    Matt Taibbi has an insightful article about Mary Jo White. Here's how it starts.

    "I was shocked when I heard that Mary Jo White, a former U.S. Attorney and a partner for the white-shoe Wall Street defense firm Debevoise and Plimpton, had been named the new head of the SEC. I thought to myself: Couldn't they have found someone who wasn't a key figure in one of the most notorious scandals to hit the SEC in the past two decades? And couldn't they have found someone who isn't a perfect symbol of the revolving-door culture under which regulators go soft on suspected Wall Street criminals, knowing they have million-dollar jobs waiting for them at hotshot defense firms as long as they play nice with the banks while still in office?"

    Read the rest of Matt's article at: http://www.rollingstone.com/politics/blogs/taibblog/choice-of-mary-jo-white-to-head-sec-puts-fox-in-charge-of-hen-house-20130125#ixzz2JydvATJ3

  5. toobad
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    toobad - February 04, 2013 6:31 am
    What's 0bama's record on putting banksters in jail? Mary Jo White will continue that record. She will be the bankster's best friend.
  6. tomtom33
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    tomtom33 - February 04, 2013 6:29 am
    I believe that the first SEC head was Joe Kennedy. Who better? He did a fine job. He knew the system well. He, himself, had abused it for many years.

    I would prefer to have a fox guard my chicken coop. And I would feed that fox very well.
  7. 7time3
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    7time3 - February 04, 2013 6:19 am
    I'll believe she changes anything when anything actually changes! Most likely, there will now be a sudden inability to find enough evidence to charge any of these crooks with any wrongdoing! One way or another, us slobs at the bottom always pay!! I really hope I'm wrong this time!
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