Flaws Plague DOJ Strategy for Prosecuting Wall Street

A recent push by the Department of Justice to prosecute high-ranking Wall Street officials for white collar financial crimes, which has led to the prosecution of 146 cases where companies received leniency through so-called deferred or nonprosecution agreements, has exposed flaws in the agency’s efforts to police Wall Street that continues to this day, reports the Wall Street Journal. The agency in recent years has won convictions or guilty pleas in about 94 percent of all criminal proceedings, and 92 percent of both white collar cases generally and those from the DOJ’s headquarters fraud section. By contrast, the DOJ’s success rate in the Wall Street cases from across the agency since 2016 is about 79 percent. It has prevailed against 23 defendants working for banks or broker-dealers, and lost cases against 6 others.

Some juries and judges in the cases found the DOJ tried to criminalize conduct that looked unseemly but wasn’t illegal. Other judges have faulted prosecutors for co-opting banks to build cases against employees in ways the employees describe as violations of their constitutional right against self-incrimination. Targeted traders have argued that the incentives forced banks to play an inappropriate role in shaping the evidence that influences whether an individual is criminally charged. In essence, they say, the DOJ push drives companies to do prosecutors’ work, giving a bank the incentive to throw employees under the bus so the bank can limit its own liability. Current and former DOJ officials say corporations don’t have any incentive to unnecessarily blame an employee who did nothing wrong and that the government conducts its own probes after receiving information from companies’ investigations.