Incentivizing Injustice

Why did no important banking executives face criminal prosecution for the 2008 financial crisis? This book seeks to answer this question by focusing on the incentives faced by the federal prosecutors who would have been tasked with bringing these cases, but instead settled for safer plea agreements.

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In a time of painful economic and legal inequities, we are still plagued by a gnawing question: why did no major bank executive face any meaningful consequences for the 2008 financial crisis? Meanwhile, average Americans lost 8.8 million jobs and $19.2 trillion in household wealth, with the crisis' impacts still reverberating throughout society. Moving beyond the popular narrative that the rich simply play by different rules, this book focuses not on the potential perpetrators, but on the powerful prosecutors deciding who faces charges and who goes home with a fine. In the years leading up to the financial crisis, the Justice Department experienced embarrassing losses and moved a deluge of resources away from everything else to fund post 9/11 counter-terrorism. White-collar federal prosecutors found themselves working in an overly cautious and under-funded institution. At the same time, the lure of defense firms had grown much stronger, offering million-dollar partnerships. Prosecutors had every incentive at this time to improve their image by obtaining big fines with banks through settlements, rather than risking complicated litigation, but at what cost to American justice and trust in the rule of law?