Joe Nocera in today’s NYT rails about the lack of prosecution in the MFG case:
Yet, a few weeks ago, Azam Ahmed and Ben Protess, who have done a remarkable job covering the MF Global bankruptcy for The Times, wrote an article suggesting that prosecutors were having trouble putting together a criminal case against anyone at MF Global. So far, wrote Ahmed and Protess, they’d been “unable to find a smoking gun.” In fact, they continued, “a number of federal prosecutors have expressed doubts” that MF Global “intentionally misused customer money.”
Apparently, the current theory is that it was all just a big accident, the chaos of those final days causing the firm’s executives to tap into customer funds without realizing it . . .
A failure to prosecute anyone at MF Global would be, if anything, even worse. It would mean that executives at a broker-dealer can indeed steal customer money and get away with it — so long as it was “unintentional.” And it would only deepen the cynicism so many people feel about government.
I’ll say what Joe didn’t: The prosecutors need to cut a deal with one of the small fish in order to catch a big (or bigger) fish. Perhaps with MFG’s Treasurer or Comptroller. If it were me, I’d let the Defense bar know that we have 3 potential immunity deals that go to the first takers (with several hi profile exceptions).
This is just like prosecuting drug dealers — you pick up the dime bag seller, roll them to the mid-level guy, repeat. Keep doing that until you reach as close to the top as you can get.
Works for pot, crack, robo-signing, and segregated account theft . . .
(Is MF Global Getting a Free Pass?)
NYT, March 12, 2012