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Holder Refutes Obama with “Indictment” of TBTF

Posted by Larry Doyle on March 12, 2013 8:25 AM |

In December 2011, President Obama was interviewed on 60 Minutes and had the following exchange with CBS’ Steve Kroft in regard to behaviors on Wall Street:

KROFT: One of the things that surprised me the most about this poll is that 42%, when asked who your policies favor the most, 42% said Wall Street. Only 35% said average Americans.

My suspicion is some of that may have to do with the fact that there’s not been any prosecutions, criminal prosecutions, of people on Wall Street.

And that the civil charges that have been brought have often resulted in what many people think have been slap on the wrists, fines. “Cost of doing business,” I think you called it in the Kansas speech. Are you disappointed by that?

PRESIDENT OBAMA: Well, I think you’re absolutely right in your interpretation. And, you know, I can’t, as President of the United States, comment on the decisions about particular prosecutions. That’s the job of the Justice Department. And we keep those things separate, so that there’s no political influence on decisions made by professional prosecutors.

I can tell you, just from 40,000 feet, that some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn’t illegal.

Is that right? Not illegal?

Well, with public pressure on this topic of illegal behaviors on Wall Street not having abated one bit since that December 2011 interview, what does the head guy at the Department of Justice have to say now?  Eric Holder recently admitted what everybody not bought and paid for by the industry already knows,

In response to a question from Sen. Charles Grassley (R-Iowa), Holder admitted that, effectively, the Justice Department could not fully pursue cases against large and influential financial institutions, out of concern over the collateral damage charges could impose on the broader economy.

“The size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy,” he said. “That is a function of the fact that some of these institutions have become too large.”

To Wall Street skeptics, the message could not be clearer: The nation’s biggest banks have grown beyond control and must be broken up.

“Holder’s admission makes action – however improbable – imperative,” said Robert Borosage, co-director of the liberal Campaign for America’s Future. “A nation of laws and markets cannot abide huge private financial institutions that are accountable to neither.”

Well, there you go. If that is not THE INDICTMENT that the American people have been seeking, I do not know what is.

The question begs, what are we going to do about the TBTF, TBTR (too big to regulate), TBTJ (too big to jail) banks because the status quo is neither healthy nor productive for our economy or our nation.

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Peter Scannell

    “Speaking at the Investment Adviser Association’s (IAA) annual compliance conference, Bowden said his unit does not want to make frivolous referrals to the SEC’s enforcement division because investigations can often be prolonged and consume substantial amounts of staff time.

    Ten percent of SEC exams have led to referrals for possible enforcement action in the last three to five years, Bowden noted. The most common referrals involve fraud, egregious harm to investors and repeat misconduct, he said.”

    So a stunning 10% of SEC exams have been referred to the SEC Enforcement Division in the last 3 to 5 years for fraudulent behavior egregiously harming investors, with much of the fraud coming from the same culprits over and over again!

    Who is their prey? Why, mom and pop of course!

    Joint Exams by SEC and CFTC Possible, Regulator Says

  • Peter Scannell

    Luke 8:17

    “For nothing is hidden that will not become evident, nor anything secret that will not be known and come to light.”

  • Peter Watts

    A view from across the pond. It appears that American Presidents are held in awe by the media and the people. They are merely politicians who through fair means or foul have managed to get to the top of the greasy pole. Had a British Prime Minister come up with such weasel reply as that which Obama gave he would have been subject to a number of follow up questions on the same topic citing facts and cases. This would not result in the Prime Minister changing his mind, but it would get the message out to the viewers. Unfortunately our regulatory authorities are equally gut less when it comes to enforcing the law against financial miscreants.

  • Russ

    It all points back to the way that the Madoff affair has been handled.

    You can’t mess with the banks, but you can go after the VICTIMS!.

  • Obsvr-1

    Geeze, if we have to leave this to Eric Bag-Holder we’ll never see anything beyond his rhetoric.

    If there is to be any justice, then the first to go to jail should be Eric Holder !!

  • fred


    Why do we perpetuate the myth that these institutions are “too big to fail”, aren’t adequate resources availible to FDIC to mitigate any fallout; what about Buzz Lightyear Ben and QE infinity and beyond?

    I’m also curious as to why the interests of creditors are
    being fully protected at public expense, are they also “too big to fail”?

    Why have regulators wasted the past 5 years; we should have “built in” safegards and bank reserves to protect the public interest by now!

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