Stephen Foley: Years of court cases ahead for Wall Street

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US Outlook: The sub-prime mortgage market is "toast". My mortgage company's products are "poison". The derivatives we've just offloaded to a client are "vomit". These are from internal emails across Wall Street as the credit market boom began to turn to bust (from Bear Stearns, Countrywide and UBS, respectively), and they have turned up in the first court cases in what looks set to be years of litigation and prosecutions.

The boom had nothing on what we've just been through, but there are parallels. Wall Street knows instinctively when something is a bubble, but the incentive is always to keep pumping out financial products at inflated values until the last possible minute. The malfeasance happens on the turn, as the clever try to offload their toxic products on the stupid. This is when their emails say one thing and they tell clients or investors another.

You hear the question all the time: why is no one in jail? To answer, I would say, patience. Enron collapsed in December 2001, but its chairman, Ken Lay, was not seen in handcuffs until July 2004. The FBI is combing assiduously through emails at Lehman Brothers; a grand jury has already been convened to assess whether to charge AIG's financial products head, Joseph Cassano.

With Wall Street back in bullish form, bankers have started condemning the "show trial" of Ralph Cioffi and Matthew Tannin, due to start next month. These two Bear Stearns managers, accused of lying to investors when their hedge funds were collapsing in 2007, are being made scapegoats for errors that were systemic, not personal or criminal, it is argued.

That might be true if they were the only ones facing criminal charges. But theirs is just a relatively easy case, from early in the crisis. It will not be the last.