Iceland Shows Up U.S. Justice System in Sending 26 Bankers to Prison for Economic Crimes
Much has been written about the lack of accountability of the U.S. banking system – particularly of high-ranking individuals – for the central role played in the economic crisis of 2008. Headlines like “Too Big to Jail” have been splashed on various covers, while these corporation leaders, after receiving massive public bailouts, were able to essentially pay their way out of prison.
Meanwhile in Iceland, criminal bankers are having a tougher time.
In two separate Icelandic Supreme Court and Reykjavik District Court rulings, the top five bankers from Kaupping and Landsbankinn (the two biggest banks in that nation) were found guilty of embezzlement, breach of fiduciary duties and market manipulation. Those convicted will serve between two-to-five years in prison. All combined, these individuals will serve 74 years in prison. The maximum penalty for such crimes is six years, though there is a pending case in the Supreme Court to determine whether that sentence should be lengthened.
Those two decisions meant that so far in Iceland, 26 bankers have been sent to prison for financial crimes related to the 2008 financial meltdown.Meanwhile in the U.S., not a single banking executive has been charged with crimes related to the crisis. This is in spite of the fact that it was the U.S. banking system that was the actual catalyst for the crisis.
And while Congress decided after the crisis to offer a $700 billion taxpayer bailout to the banks, Iceland’s representatives wrangled supervisory authority over its banks. It’s been well-documented that even in the wake of the crisis, banks continued to violate laws, limit relief to struggling homeowners and initiate foreclosures in Florida and across the country with no right to do so.
In a statement provided by Icelandic President Olafur Ragnar Grimmson, this entirely different track was noted. He stated that the implementation of currency controls, provisions of support for the people and allowing banks fail has helped them to more quickly regain financial footing.
This kind of accountability is simply non-existent in the U.S. In fact, the number of federal white-collar prosecutions is 37 percent lower than what it was 20 years ago under the Clinton presidency. An analysis of U.S. Justice Department data revealed that as of this fiscal year, there will be fewer than 6,900 white-collar prosecutions nationally in 2015. That’s compared to 11,000 in 1995.
The rate of prosecutions was slashed by 50 percent – 1 in 24,400 in 1995 versus 1 in 46,600 in 2015.
And even back then, the number of prosecutions of these cases weren’t as high as they should have been, considering the amount of financial crime occurring.
Consider that after the savings-and-loan scandal, there were more than 3,000 prosecutions resulting in 800 high-level bank executives being jailed.
After the 2008 financial crisis, not only did executives evade consequences personally, banks continued to operate with little to know regulation or federal oversight and rake in yearly profits of more than $160 billion.
Meanwhile, the federal government in Iceland has said it isn’t finished prosecuting and imprisoning those who were behind the manipulation of the market that led to the nation’s collapse. Even now, the country is still working to pay back all the loans it needed just to keep the country functioning operationally.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.