Justice has decided not to go after Joe Cassano, the man who crashed the world.
The WSJ attributes this decision to the “high bar [the government] needs to meet to make criminal charges stick in a courtroom.”
How nice that the government has discovered this bar. That could have something to do with its getting its head scraped on some recent prosecutions, particularly including the Bear Stearns hedge fund managers.
Tom Kirkendall notes that this “high bar” unfortunately didn’t stop the government from prosecuting business executives “who did nothing other than be involved in transactions with AIG have already had their careers ruined and their lives uprooted by dubious criminal prosecutions,” or for ruining the lives of many who were unlucky enough to be with Enron rather than AIG (or Bear, for that matter) – all cases involving hindsight prosecutions of disclosures in the midst of a fast-moving bank run.
As I said when it first appeared Cassano wouldn’t be prosecuted
maybe we’re moving toward sanity in criminalizing agency costs. Or maybe the whipsaw by recent developments is just increasing the luck component of the lottery. It depends on whether you want to look at it as a glass mostly empty or one only slightly filled.