Judge Rakoff Struck By How Criminal Investigation of Banks Proceeding in a Different Way Than They Had in the Past (Like Not at All)

NY Times

Stern Words for Wall Street’s Watchdogs, From a Judge

And what of the recent financial crisis? The statute of limitations on most plausible charges is running out, and it seems there will not be a single prosecution of a prominent figure in the entire mess.

Judge Jed S. Rakoff wants to know why. In a blistering essay in the issue of The New York Review of Books that arrives this week, he argues that the Justice Department has failed in its rudimentary responsibilities, offering excuses instead of action.

MI-BM129_RAKOFF_D_20111108174714Judge Rakoff, who sits on the Federal District Court in Manhattan, has long been outspoken, idiosyncratic and iconoclastic. In 2002, in a decision that was promptly overturned, he ruled the federal death penalty statute unconstitutional. More recently, he has presided over a series of big financial cases and has blocked proposed settlements as too opaque or lenient, to the frustration of both Wall Street and prosecutors.

I asked him what had prompted his unusual essay.

“As a judge, I got to see many cases that grew out of the financial crisis and to see situations that gave me pause,” he said. “When I added my own background as both a prosecutor and defense counsel, I was struck by how things were proceeding in a different way than they had in the past.

“That caused me to think about it more than I otherwise would have,” he said, “and I thought my views as a citizen might commend themselves to others.”

In his essay, Judge Rakoff is careful to say that he does not know if high-level executives committed crimes as they presided over the collapse of the market for mortgage-backed securities. That would seem to keep him out of judicial-ethics trouble and available to hear future cases. But he seems inclined to credit the conclusions of the Financial Crisis Inquiry Commission, which found rampant incompetence, mendacity and fraud.

Read Judge Rakoff’s essay yourself.

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