Linda posted here on To Big To Fail and made suggestions as to how to fix it. I want to just add some more background information to the discussion.
Via Bob Swern at Daily Kos who linked to a post by Pam Martens at Wall Street on Parade comes a bit of transcript from the confirmation hearing for Mary Jo White for the SEC.
Senator Brown: When you were U.S. Attorney, my understanding is you consulted Bob Rubin and Larry Summers when considering whether to bring charges against financial firms. Is that correct?
White: I actually consulted the Deputy Attorney General who had Mr. Summers call me back. I was asking a factual question.
Senator Brown: Did they reject the argument that institutions could not be prosecuted to the fullest extent of the law?
White: I’d like to answer that yes or no but I can’t. Essentially, I was seeking information based on an argument that had been made by the lawyers for the institution that I ultimately indicted, as to whether an indictment of that institution would result in great damage to either the Japanese economy or the world economy. And the answer I got back is that I should proceed to make my own decision; which I took to mean that it would likely not have that impact.
Pam then notes:
There actually is an official policy but its finer points have certainly not been expanded upon by either Attorney General Holder or SEC nominee Mary Jo White. The policy is called Title 9, Chapter 9-28.000: Principles of Federal Prosecution of Business Organizations.* The policy thoroughly advocates the prosecution of corporations — especially when there is a serial history of fraud as in the case of Wall Street.
She quotes from the policy:
“…Virtually every conviction of a corporation, like virtually every conviction of an individual, will have an impact on innocent third parties, and the mere existence of such an effect is not sufficient to preclude prosecution of the corporation.”
*The link for the actual policy is in Pam’s article.