A last-ditch effort by federal and state law enforcement authorities to hold Wall Street accountable for nearly bringing down the U.S. economy is unlikely to lead to any criminal charges against big bank executives, according to a source close to the investigation.
Barring a “hail mary pass,” said the source, who spoke on the condition of anonymity because the investigation is still ongoing, the members of a task force President Barack Obama formed in January to investigate fraud in the residential mortgage bond industry will instead most likely bring civil lawsuits against some of the banks involved, though it isn’t clear when these cases might come.
That means any penalties for those accused of fraud or other misconduct would be measured in dollars, not jail terms.
A spokesman for New York Attorney General Eric Schneiderman, a co-head of the task force and the driving force behind its formation, declined to comment.
Adora Andy, a Department of Justice spokeswoman, said in a statement that “all appropriate remedies, civil and criminal, are on the table.”
“As always, if working group members uncover evidence of fraud or other illegal conduct, we will pursue such conduct aggressively,” Andy said.
The subprime mortgage bubble popped more than five years ago, triggering a full-fledged economic meltdown. Since then, the question confronting regulators and government prosecutors has been whether the banks that drove the market’s expansion simply made terrible business decisions, or committed fraud in order to reap short-term profits.
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