In post-Lehman clean-up, top banker prosecutions stumble
By Sarah White
LONDON (Reuters) - Will top bankers' behavior ever land them in jail? Or are bad business decisions even a crime at all?
Five years on from the bankruptcy of Lehman Brothers, the debate over how to hold senior bank bosses to account for failures is far from over, but legal sanctions for top executives remain a largely remote threat.
Even as laws evolve - in Britain, the government wants to criminalize recklessness in banking - a repeat of the global financial crisis and near-collapses of 2008 would not necessarily result in many more prosecutions today, lawyers say.
At issue is the difficulty in pinning the blame on any one person for risks and decisions taken throughout a firm - one of the main obstacles to building such cases so far.
"It's a case of the confused lines of responsibility and accountability," said Judith Seddon, director in law firm Clifford Chance's business crime and regulatory enforcement unit in London. "When you're pursuing an individual, if they've delegated responsibilities ... it's much more difficult in a big organization."
Regulators the world over stepped up their scrutiny of banks and cracked down on financial crime in the wake of public anger over costly bailouts and subsequent scandals. But that has so far translated into relatively few attempts to bring charges against those in the highest echelons of banking.
In the United States, home to Lehman Brothers, no top executives at large Wall Street or commercial banks have been convicted of criminal charges relating to the 2008 crisis.
Across Europe, the implosion of Iceland's financial sector five years ago has resulted in some of the most prominent convictions so far, with the former chief executive of failed lender Glitnir among those sentenced to jail time. Continued...