Every Financial Crisis Charge The SEC Filed In One Depressing Chart


wallstflag 3:2The five-year anniversary of the Lehman Brothers bankruptcy this week has produced a variety of depressing retrospectives on the financial crisis and how little has changed about the finance business since it wrecked the U.S. economy. The Wall Street Journal adds to that pile with a single chart depicting the players and outcomes in the 138 charges the Securities and Exchange Commission (SEC) filed relating to the crisis.

Despite only losing or dropping only six of the 138 charges, the SEC won back just $2.7 billion in fines, penalties, and disgorged profits. The SEC’s haul, a tiny fraction of the $66 billion in legal costs relating to the crisis that the biggest banks have incurred, is less than one one-thousandth of one percent of what the financial crisis cost the country. One recent estimate put the total costs of the financial crisis at $14 trillion or more. Many of the institutions most directly involved in causing the crisis escaped charges entirely, including Lehman Brothers itself.

Check out the Journal’s chart (click to enlarge):


More than a quarter of the charges are still outstanding, and SEC Director Mary Jo White has pledged to push for admissions of guilt in some cases going forward. The largest settlements within the $2.7 billion total, such as a $550 million deal with Goldman Sachs over an allegedly fraudulent mortgage-backed security deal, allowed the institution paying the fine to avoid admitting or denying guilt. The commission scored its first admission of guilt in years last month, but the case involved a hedge fund manager misusing investor funds and had nothing to do with the financial crisis. Rather than pushing for guilty admissions for behavior in the financial meltdown, the SEC is giving up on crisis cases with the five-year statute of limitations on most fraud about to expire.

In the half-decade since the crisis, key rules in the 2010 Dodd-Frank Wall Street reform package have been watered down by industry lobbyists and complicit regulators, the banking industry has grown even more consolidated and even more profitable, surveys on Wall Street ethics have shown a continued high willingness to perpetrate fraud for profit, and the mortgage industry continues to mislead, abuse, and wrongly foreclose on consumers nationwide.