Gilchrist on “The Special Problem of Banks and Crime”

Law professors are beginning to get to grips with the massive amount of wrongdoing at American financial institutions. Here’s part of the abstract for Gregory M. Gilchrist’s article on “The Special Problem of Banks and Crime:”

Federal prosecutors face increasing criticism for their failure to indict large banks and bankers for serious criminal conduct, including allowing violent drug cartels to launder hundreds of millions of dollars, willfully conducting business with rogue nations and terrorists, and manipulating the LIBOR to defraud investors. This Essay argues that the non-prosecution of banks is often justified by proper consideration of externalities and that the non-prosecution of bankers is often justified by lack of evidence. Nevertheless, the result is that extremely serious criminal conduct is penalized by mere fines and negotiated terms of probation, and this introduces deterrence and expressive costs to the legal system.

The idea that “non-prosecution of bankers is often justified by lack of evidence” is particularly interesting in a post-fusion center, post-PRISM world. If robbery suspects are demanding NSA phone records for exoneration, how soon might authorities consult them to finger paladins of peculation?

This is part of a series on crime and scandal at financial institutions. Prior posts include:

1. Audit Trails: The Corporate Surveillance We Need.

2. Resisting Elites’ Resistance to the Rule of Law

3. Complexity, Opacity, and Permanent Crisis

4. The Poor Get One Strike; Banks Get Thousands

5. On the Servicing Settlement

6. Material Foundations of Corporate Culture.

7. Lies and Libor.

8. Big Rig: Libor and Beyond.

Frank Pasquale

Frank is Professor of Law at the University of Maryland. His research agenda focuses on challenges posed to information law by rapidly changing technology, particularly in the health care, internet, and finance industries.

Frank accepts comments via email, at pasqresearch@gmail.com. All comments emailed to pasqresearch@gmail.com may be posted here (in whole or in part), with or without attribution, either as "Dissents of the Day" or as parts of follow-up post(s). Please indicate in your comment whether or not you would like attribution, or would prefer your comment (if it is selected for posting) to be anonymous.

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1 Response

  1. Shag from Brookline says:

    The New York Times Editorial Board reports (7/5/13) “Reining In the Regulators” on a Senate bill that could end up protecting banks even more. (Years back, my favorite barkeep would proclaim to attorney customers that they had a license to steal. I guess bankers are merely licentious.)