It looks as though the government does not think so. They have focused on the issue for several years and actually had 70 convictions. Its most recent conviction is SAC Capital, which admitted to wire fraud and securities fraud and agreed to pay a $900 million penalty and $300 million in disgorged profits.
James Kwak points out that SAC was convicted because it implicitly encouraged its employees to commit insider trading and did nothing to prevent them from committing insider trading. That being the case why didn't the government go after the firms that encouraged its employees to buy loans they knew to be fraudulently underwritten; package loans that they knew did not comply with the description of the loans in the placement memorandum; lie to buy-side clients about the contents of the securities they were selling them; or sell Fannie and Freddie loans that they knew did not meet the criteria they claimed; push toxic loans onto poor people; mislead investors about the contents of CDOs; fraudulently foreclose on people when you don't even own the note for their mortgage loan.
Kwak makes a strong point.
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