I spoke with a Maryland Congressman with a close connection to the story below. It was his father who wrote and sponsored the law to which the subject of this interview refers......John Sarbanes....of the 'Sarbanes-Oxley Act'. His father wrote this law to protect people from the likes of Enron and the Savings and Loan Crisis....he wrote it just for this massive mortgage fraud. It makes any corporate executive signing an accounting report on the state of the company personally and criminally responsible for fraud when found the accounting to be false. Which is the case with all executives in all these Wall Street banks. That alone would put these executives in jail, but the Justice Department and the SEC will not do it.
I stood beside John Sarbanes at a campaign event and I asked him why he was not shouting loudly and strongly for the American people as his father did and calling for Sarbanes-Oxley to be enforced. His response - 'that's my father bill, not mine'.
This Sixty Minutes program is a follow-up on the movie "Inside Job"
The following script is from "The Case Against Lehman" which originally aired on April 22, 2012. Steve Kroft is the correspondent. James Jacoby and Michael Karzis, producers.
On September 15, 2008, Lehman Brothers, the fourth largest investment bank in the world, declared bankruptcy -- sparking chaos in the financial markets and nearly bringing down the global economy. It was the largest bankruptcy in history -- larger than General Motors, Washington Mutual, Enron, and Worldcom combined. The federal bankruptcy court appointed Anton Valukas, a prominent Chicago lawyer and former United States attorney to conduct an investigation to determine what happened.
Included in the nine-volume, 2,200-page report was the finding that there was enough evidence for a prosecutor to bring a case against top Lehman officials and one of the nation's top accounting firms for misleading government regulators and investors. That was two years ago and there have been no prosecutions. Anton Valukas has never given an interview about his report until now.
Steve Kroft: This is the largest bankruptcy in the world. What were the effects?
Anton Valukas: The effects were the financial disaster that we are living our way through right now.
Steve Kroft: And who got hurt?
Anton Valukas: Everybody got hurt. The entire economy has suffered from the fall of Lehman Brothers.
Steve Kroft: So the whole world?
Anton Valukas: Yes, the whole world.
When Lehman Brothers collapsed, 26,000 employees lost their jobs and millions of investors lost all or almost all of their money, triggering a chain reaction that produced the worst financial crisis and economic downturn in 70 years. Anton Valukas' job was to provide the bankruptcy court with accurate, reliable information that the judges could use to resolve the claims of creditors picking over Lehman's corpse.
Steve Kroft: Had you ever done anything like this before?
Anton Valukas: I've never done anything like Lehman Brothers. I don't think anybody else has ever done anything like Lehman Brothers.
Steve Kroft: So your job, I mean, in some ways, your job was to assess blame?
Anton Valukas: Our job is to determine what actually happened, put the cards face up on the table, and let everybody see what the facts truly are.
Valukas' team spent a year and a half interviewing hundreds of former employees, and pouring over 34 million documents. They told of how Lehman bought up huge amounts of real estate that it couldn't unload when the market went south -- how it had borrowed $44 for every one it had in the bank to finance the deals -- and how Lehman executives manipulated balance sheets and financial reports when investors began losing confidence and competitors closed in.
Steve Kroft: Did these quarterly reports represent to investors a fair, accurate picture of the company's financial condition?
Anton Valukas: In our opinion, they did not.
Steve Kroft: And isn't that against the law?
Anton Valukas: It certainly, in our opinion, was against civil law if you will. There were colorable claims that this was a fraud, yes.
By colorable claims Valukus means there is sufficient evidence for the Justice Department or the Securities and Exchange Commission to bring charges against top Lehman executives, including CEO Richard Fuld, for overseeing and certifying misleading financial statements, and against Lehman's accountant, Ernst and Young, for failing to challenge Lehman's numbers.
WE CERTAINLY HAVE SPACE FOR THESE WALL STREET CRIMINALS IN OUR NEW PRIVATE PRISON BUBBLE......RIGHT BESIDE THE POOR PEOPLE THEY FORCED INTO POVERTY AND A CRIMINAL EXISTENCE
April 22, 2012 9:23 AM The cost of a nation of incarceration (CBS News) Is it fair to call the United States the "incarceration nation"? That's what some experts say. And even some veteran law enforcement and correction officials think something's gone wrong. Our Cover Story is reported now by Martha Teichner: At the Gadsden County Jail near Tallahassee, Fla., there are bunks, and mattresses on the floor. The jail has a capacity of about 150 inmates, but there are presently 230 inmates in the facility right now. Walter McNeil, president of the International Association of Chiefs of Police, sees the same story everywhere he goes in the U.S. In one "pod" of Gadsen jail, in which there are 24 bunks, there are 28 inmates - and by the time the weekend comes, there will be five or six more inmates. That's nothing compared to California. Overcrowding was so bad there, the U.S. Supreme Court called it "cruel and unusual punishment," and last May ordered the state to cut its prison population by more than 30,000. Nationwide, the numbers are staggering: Nearly 2.4 million people behind bars, even though over the last 20 years the crime rate has actually dropped by more than 40 percent. "The United States has about 5 percent of the world's population, but we have 25 percent of the world's prisoners - we incarcerate a greater percentage of our population than any country on Earth," said Michael Jacobson, director of the non-partisan Vera Institute of Justice. He also ran New York City's jail and probation systems in the 1990s. A report by the organization, "The Price of Prisons," states that the cost of incarcerating one inmate in Fiscal 2010 was $47,421 per year. "In states like Connecticut, Washington state, New York, it's anywhere from $50,000 to $60,000," he said. Yes - $60,000 a year. That's a teacher's salary, or a firefighter's. Our epidemic of incarceration costs us taxpayers $63.4 billion a year. The explosion in incarceration began in the early 1970s - the political response to an explosion in urban violence and increased drug use. "So 'Tough on crime,' 'three strikes, you're out,' 'Let 'em rot, throw away the key' - all that stuff resulted in more mandatory sentencing, longer and longer sentencing," said Jacobson