This week, we sit down with journalist Jesse Eisinger, author of The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives. He was previously at the Wall Street Journal, TheStreet.com and Conde Nast Portfolio, and is currently at Pro Publica, where he won a Pulitzer Prize for reporting on various CDOs.
Like many of us, Eisinger was perplexed and even infuriated by the utter lack of prosecution following the great financial crisis and recession. Fraud was rampant, with an obvious paper trail leading to senior management at various banks and brokers. It should have made for winning prosecutions and help top heal society following the crash and recovery. The issue of why white collar criminals are treated with such respect, and afforded rights not available to blue collar criminals gets a thorough review.
Eisinger traces the collapse of Enron due to accounting fraud, along with auditor Arthur Andersen’s many frauds (Enron, Worldcom, etc.). When Andersen received the corporate death penalty, it was the start of a great unraveling at the Justice Department and its ability to win prosecutions in court. This was followed by a series of events as the credit crisis built; by the time the economy fully melted down, the prosecutorial arm of the government had effectively been neutered. This was not an accident, but rather was a design of corporate litigators and the defense bar.
All of the books referenced can be found here.
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