Obama: "They Did Nothing Illegal, Only Found Loopholes that We Worked to Close."

[KoKo]

(President Obama's Presser today gets criticism from Progressive Democrats)

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Obama on Bank Prosecutions: They Did Nothing Illegal, Only Found Loopholes That We Worked to Close
By: David Dayen Thursday October 6, 2011 8:55 am


For perhaps the first time, President Barack Obama was forced to explain why there have been no prosecutions of Wall Street executives for their fraudulent actions during the run-up to the financial crisis. Asked by Jake Tapper to explain this behavior, Obama basically suggested that most of the actions on Wall Street weren’t illegal but just immoral, and that his Administration worked to re-regulate the financial sector with the Dodd-Frank reform legislation.

“Banks are in the business of making money, and they find loopholes,” the President said. Apparently forging and fabricating documents to prove ownership of homes that are subsequently stolen from borrowers is now a loophole.

Many of the practices on Wall Street “weren’t necessarily against the law but they had a huge destructive impact,” said the President. The work of Bill Black, the Financial Crisis Inquiry Commission, the Senate Permanent Subcommittee on Investigations, and a host of other official studies, analyses, and even court cases cut against that. Just the other day, a new whistleblower lawsuit against banks for setting illegal fees against military personnel wasn’t joined by the Justice Department.

In a follow-up, the President said that “if somebody they violated laws on the books, they need to be prosecuted, and that’s the Attorney General’s job.” Of course, investigations have to actually be carried out, and the President’s Justice Department has been at the lead of a foreclosure fraud settlement which would bail out banks that would otherwise owe in the trillions for fraudulent practices with the origination and securitization of loans, for a pittance of a sum. Only the work of a few Justice Democrats have put a stop to this.


http://news.firedoglake.com/2011/10/06/obama-on-bank-prosecutions-they-did-nothing-illegal-only-found-loopholes-that-we-worked-to-close/

[ProSense]

1. Actually

"They Did Nothing Illegal, Only Found Loopholes that We Worked to Close."

...that's not what the President said. The OP actually misrepresents the President's point, which wasn't that they did "nothing illegal."

Here's what he actually said:

<...>

THE PRESIDENT: Well, first on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless. That’s exactly why we needed to pass Dodd-Frank, to prohibit some of these practices.

The financial sector is very creative and they are always looking for ways to make money. That’s their job. And if there are loopholes and rules that can be bent and arbitrage to be had, they will take advantage of it. So without commenting on particular prosecutions -- obviously that’s not my job; that’s the Attorney General’s job -- I think part of people’s frustrations, part of my frustration, was a lot of practices that should not have been allowed weren’t necessarily against the law, but they had a huge destructive impact. And that’s why it was important for us to put in place financial rules that protect the American people from reckless decision-making and irresponsible behavior.

<...>

Obviously some of them did.

Former Chairman of Taylor, Bean & Whitaker Sentenced to 30 Years in Prison and Ordered to Forfeit $38.5 Million

It all comes down to one event: the repeal of Glass-Steagall.

The reason Dodd-Frank was necessary is because Glass-Steagall, which made a lot of the actions leading to the crisis illegal, was repealed.

Still, the Obama administration has been prosecuting financial fraud connected to the crisis: StopFraud.gov.

[dkf]

2. Good site. Thanks.

[proverbialwisdom]

4. A lot of people will probably miss this and blame the administration if it isn't made clear.

K&R

[proverbialwisdom]

6. Here, for example.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=2069075&mesg_id=2069075

[emulatorloo]

7. Thanks. More FDL selective quotation and disinformation n/t

[KoKo]

14. Its in the transcript of the yesterday's Press Conference. Jake Tapper asked the question..

You know where to look it up.

http://www.marketwatch.com/story/transcript-of-obamas-press-conference-2011-10-06

[SomethingFishy]

16. Dodd-Frank?

You mean the new regulations that were passed? Of which out of the 400 regulations that are on the bill only 38 have been put into place?

Dodd Frank would help if it were actually implemented.

I see this as playing a word game. "The president said this, the president said that, he meant this , he meant that.. while Obama has made some inroads on many issues, the economy is not one of them. Now whether or not that is his fault or the fault of Republican obstructionism can be debated. But if you are posting this in defense of Obama's economic record it's not going to work. People are not stupid, handing over the Fed and the economy to the people who screwed it up in the first place will work against him.

I do agree that this all goes back to Glass-Steagal, it needs to be re-instated.


oh and a link to the Dodd-Frank thing:

http://corporatejusticeblog.blogspot.com/2011/09/dodd-frank-at-one-year.html

[izquierdista]

3. Have I been asleep?

Did I miss the 3 years of on-going investigations?

[Zorra]

9. No. The investigation is secret. Trust me, it is in good hands.

[KoKo]

10. Jake Tapper asked Obama "Why haven't those on Wall Street been Prosecuted?"

According to ABC News and What I watched on TV of his whole speech to verify...this is what President Obama Replied:

-------

But the president made clear that a strong, effective financial sector is necessary for the country to grow economically. “I used up a lot of political capital – and I’ve got the dings and bruises to prove it — in order to make sure that we prevented a financial meltdown and that banks stayed afloat. And that was the right thing to do, because had we seen a financial collapse, then the damage to the American economy would have been even worse,” he said.

Obama also touted his efforts to ensure tougher oversight of the financial industry. “For us to have a healthy financial system, that requires that banks and other financial institutions compete on the basis of the best service and the best products and the best price, and it can’t be competing on the basis of hidden fees, deceptive practices or, you know, derivative cocktails that nobody understands and that expose the entire economy to enormous risks,” he said.

Asked about prosecutions of Wall Street executives and why there haven’t been any, the president said a lot of the actions that led to the financial meltdown weren’t “necessarily illegal, it was just immoral or inappropriate or reckless.

“The financial sector is very creative, and they are always looking for ways to make money,” he said. ”That’s their job. And if there are loopholes and rules that can be bent and arbitrage to be had, they will take advantage of it.”

http://abcnews.go.com/blogs/politics/2011/10/obama-says-wall-st-protests-voice-widespread-frustrations/

[Segami]

5. Dupe post.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=2069075&mesg_id=2069075

.

[RB TexLa]

8. That's true

[KoKo]

11. But, the question is...Why weren't Wall Street, Mortgage Loan Conglomerates and Others who Stole .

Prosecuted?

Here's what our President said:


Asked about prosecutions of Wall Street executives and why there haven’t been any, the president said a lot of the actions that led to the financial meltdown weren’t “necessarily illegal, it was just immoral or inappropriate or reckless.

“The financial sector is very creative, and they are always looking for ways to make money,” he said. ”That’s their job. And if there are loopholes and rules that can be bent and arbitrage to be had, they will take advantage of it.”


http://abcnews.go.com/blogs/politics/2011/10/obama-says-wall-st-protests-voice-widespread-frustrations/

[RB TexLa]

12. Because they didn't break laws. Are you wanting to prosecute people based

on morality?

[KoKo]

13. You aren't up to speed on how Country Wide, BOA, Goldman broke laws?

Along with many others?

I can't blame you. You might be young and not up on the financial fraud that took place. But, others here on DU have documented it and reported about it. Along with leading reporters and books written about it.

[Tierra_y_Libertad]

15. CYA by relegating responsibility.