"You Call That Tough?"

Joe Nocera:

You Call That Tough?, by Joe Nocera, Commentary, NY Times: The only thing missing from Preet Bharara’s press conference was the blaring of trumpets. It was Tuesday, and the U.S. attorney in Manhattan was proudly unveiling a lawsuit against Deutsche Bank... Bharara spoke sternly about how the bank had defrauded the Federal Housing Administration...

Listening to Bharara, one could easily think that prosecutors were finally — finally! — getting tough on the bad behavior that helped bring about the financial crisis. Alas, it was mainly an illusion. ...

To give him his due, Bharara has brought serious insider-trading charges against Raj Rajaratnam, the hedge fund manager... But that case doesn’t have anything to do with the events that led to the financial crisis... He also put Bernie Madoff in prison, though that didn’t exactly require heaving lifting. ...

As for the big fish, they’re all walking away unscathed. ... I know that these are difficult cases to win. The one time prosecutors brought a criminal case involving the financial crisis — against two Bear Stearns hedge fund managers whose fund collapsed in the summer of 2007 — they lost. But so long as prosecutors resist bringing criminal cases against financial executives, they are sending a message. Crime pays.