Could some Wall Street bankers finally end up behind bars for fraud in connection with the financial crisis? Up to now, we haven't seen any high profile criminal prosecutions of bank execs, but that may soon change. The Manhattan District Attorney is going after several key former Bear Stearns mortgage bond traders for allegedly misrepresenting securities and for an alleged double-dipping scheme, reported here in January by Teri Buhl. She writes a follow-up today breaking this news in the Distressed Debt Report. How hard will it be to throw these former Bear execs -- all of whom now hold prominent positions at other financial firms -- in jail?
Tragically, Buhl's article is behind a pay wall. But it reports that the Manhattan DA hasn't determined if they will ultimately charge the former Bear traders with a misdemeanor or a felony -- it depends on whether they can prove intent to defraud.
The article further says that New York State Assemblyman Joseph Morelle, who also serves as the chairman of the Assembly Insurance Committee, is leading a campaign to look into possible charges of insurance fraud as well. Those charges depend on if the former Bear execs "knowingly made materially false representations that insurers had justifiably relied on, and that caused damage to the insurers." Morelle has also been working to persuade the New York Attorney General to investigate, according to Buhl. She details some of these allegations in a blog entry today, which thankfully you can read for free.