New York State has the toughest financial fraud law in the country. Under New York’s 1921 Martin Act, the State Attorney General’s office can bring both criminal or civil charges.
Despite that important fact, no CEO or CFO or key executive of any major Wall Street bank has been prosecuted by the New York State Attorney General for their role in the 2008 crash – which crippled the U. S. economy and has left the nation with GDP growth of two percent or less ever since. Despite the Martin Act’s unique anti-fraud statutes, Wall Street banks have been churning out serial new crimes since the 2008 crash, proving that both Justice Department prosecutors in Washington and timid prosecutors in New York are failing miserably at their jobs in deterring Wall Street crime.
What power brokers in New York do best is flood presidential campaigns with money and then fill key cabinet posts with cronies who understand how the game is played between New York and Washington. President Obama nominated Jack Lew to be his Treasury Secretary, despite the fact that he had been Chief Operating Officer of the very unit of Citigroup that crashed the bank. After the bank received the largest taxpayer bailout in U. S. history, Lew was given a $940,000 departing bonus from the insolvent bank because his employment contract at Citigroup guaranteed it as long as Lew accepted ‘a full time high level position with the United States Government or a regulatory body.’ In other words, the serially charged Citigroup needed to add another regulator’s name to its speed dial to Washington.
The Treasury Secretary’s post gained even more clout after Obama signed into law the Dodd-Frank financial reform legislation in 2010. Under the new law, the Treasury Secretary would chair the newly created Financial Stability Oversight Council, consisting of every major regulator of Wall Street.
This post was published at Wall Street On Parade By Pam Martens and Russ Marte.
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