While conduct that contributed to the 2008 market collapse was “morally reprehensible,” it wasn’t necessarily criminal, said U.S. Attorney General Eric Holder.
In remarks made yesterday at Columbia Law School in New York, Holder said he understands “the public desire to, as one pundit put it, ’see the handcuffs come to Wall Street.’”
“We’ve found that much of the conduct that led to the financial crisis was unethical and irresponsible,” Holder said without specifying the activities he was describing. “But we also have discovered that some of this behavior, while morally reprehensible, may not necessarily have been criminal.”
The Obama administration has faced criticism from some Democratic lawmakers for not bringing more prosecutions related to the market collapse.
President Barack Obama announced the creation of a Justice Department unit to investigate misconduct in the bundling of mortgage loans into securities in his State of the Union speech on Jan. 24.
The Justice Department “will not hesitate to bring prosecutions” where there’s evidence of criminal wrongdoing, Holder said. “When we don’t, we will continue to use other tools available to us, such as civil sanctions, to hold people and institutions accountable.”
Holder told his audience of law students, faculty and others that the Dodd-Frank Act, the regulatory overhaul enacted in 2010, is “so important right now” because “we had in place regulations that existed since the Great Depression, and for whatever reason we started to dismantle that in the 1990s.”
On a different issue, Holder lamented that the suspected terrorists detained at Guantanamo Bay, Cuba, remain in limbo “because Congress won’t let us act.”
He said that if the trial of the self-described mastermind of the Sept. 11, 2001, terrorist attacks had been allowed to take place in a civilian court in New York City, “the case would have been done.”
The criminal case against Khalid Sheikh Mohammed and four alleged accomplices was returned in April to the military commissions system, after the Obama administration abandoned plans to try the case in New York.
Not allowing the civilian trial was “a fundamental mistake,” Holder said, adding that “New York could handle the case.”
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