Long past the point where you probably had any doubts, McClatchy reporter Chris Adams pretty much proves the proposition that American democracy has morphed into an oligarchy by researching the way our Democrat administration - a supposedly "liberal" one - has shamelessly kowtowed to corporate interests by refusing to indict their clearly criminal activities. (Via Mark at Norwegianity)
Forget too big to fail. In the eyes of federal regulators, many Wall Street firms are too big to punish.
During the past three years, some of the nation's largest financial firms have been accused by the government of cheating or misleading clients and ripping off tens of thousands of consumers of their investments.
Despite these findings, these financial giants got, sometimes repeatedly, special exemptions from the Securities and Exchange Commission that have saved them from a regulatory death penalty that could have decimated their lucrative mutual fund businesses.
Among the more than a dozen firms that have gotten these SEC get-out-of-jail cards since January 2007 are some of Wall Street's biggest, including Bank of America, Citigroup and American International Group.
`SEC rules permit corporate lawbreakers to apply for what are known as Section 9(c) waivers from one of the agency's harshest penalties — effectively shuttering the violator's mutual fund operations — but regulators never rejected any of these firms' applications. While the firms were punished in other ways, they were spared from what some claimed would be "severe and irreparable hardships."
Lest you think this is merely more Bushistic ass-kissing -
Earlier this year, for example, the SEC said a division of E-Trade Financial had been slicing tiny amounts of money off "tens of thousands" of stock trades, using tactics such as "trading ahead" of customers. That means that even when a customer had placed an order to buy or sell stocks, E-Trade executed its own trade for the same stock first, denying the customer the best price.
The SEC calculated that E-Trade had cost its customers $28.3 million. While not admitting guilt, E-Trade settled the case in U.S. District Court in New York and agreed to pay $34 million in penalties.
In March, E-Trade applied for a Section 9 waiver. Without it, the company said, its in-house mutual fund operation could have been decimated, potentially causing customers "severe and irreparable hardships." It also said that it needed exemption from punishment that "could disrupt investment strategies," "frustrate efforts to manage effectively the funds' assets," and increase the costs to people who owned them, E-Trade said. More than 1,500 employees could be affected.
Eight days later, the SEC indicated that it would grant the request.
To the corporate-owned SEC, "disrupting investment strategies" would appear to be a serious reason for killing any attempt by the law to apply sanctions, let alone trials and jail-time for the executives responsible. But that is clearly just the excuse for the waiver - and a pretty lame one. What happened in fact was that E-Trade bought its way out of any consequences for its illegal activities with a paltry $34Mil and that, according to the SEC is punishment enough, and E-Trade can go back on its word and keep right on doing what it was doing before.
Two weeks after that, E-Trade closed the very mutual funds at issue — harming the very customers it told the SEC it was trying to help.
In fact, at the same time E-Trade was asking the SEC to help it save those funds, the company had already filed notice elsewhere at the SEC that it was planning to close them, SEC records show. At the time E-Trade asked for its waiver, most of the funds couldn't even be purchased any more.
The waiver still helps E-Trade because it could allow the company to restart its mutual funds. E-Trade had no comment on its actions.
But never mind. Nobody really believed they meant it, anyway. The point here is that in a democracy, there are consequences for illegal activities engaged in by corporations. In an oligarchy, there aren't. In an oligarchy, only the hoi-polloi go to jail for breaking the law. White collar criminals get told they ought to be more careful about who they rip off and how they do it, then are given a lunch and sent out to steal some more.
John Edwards' "Two Americas" is a now a legal reality as well as a political and social one. Don't you feel special?