Stephen Foley: Bankers' actions a crime of passion
Saturday 06 February 2010
US Outlook: There ought to be a legal defence of crime passionnel for executives accused of fraud.
There's a vast difference between the casual lies of mortgage brokers – the wilful negligence of mortgage lending firm bosses and the double-speak of mortgage derivative salesmen – and the other types of fraud that characterise the credit crisis. This second category, crimes of passion, are the desperate actions of executives who bent or broke the rules in the hope of saving an impossible situation, in the hope of saving themselves, their firm, and sometimes even the whole financial system.
The alleged fraud committed by Ken Lewis, the chief executive of Bank of America in 2008, was to mislead his shareholders over the state of Merrill Lynch's finances in the run-up to the closure of their merger. To the extent that a lawsuit by the New York attorney general, Andrew Cuomo, has any merit – and it is difficult to tell because it reads more like a political speech than a legal filing – I think Mr Lewis can invoke a crime passionnel defence in the court of public opinion.
In the febrile atmosphere of late 2008, giving a running commentary on losses at Merrill Lynch was tantamount to inviting a run. I can't blame Mr Lewis and his advisers for looking for every legal opportunity to keep Merrill's deteriorating condition private while they searched for a solution (in this case another unedifying government bailout).
The high-profile legal cases so far have gone after the desperate, supposed misdeeds of executives in the middle of a panic (at Bears Stearns hedge funds or the Reserve Primary money market fund, for example). In the interests of deterrence, let's hope the focus soon shifts to the inflators of bubbles, rather than their victims.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...