(MintPress) – The 2008 financial crisis wiped out $11 billion of personal wealth, eliminated millions of jobs and led to 10 million home foreclosures. Long after the demise of Occupy Wall Street’s vibrant public protest, the vestiges of the movement continue to challenge the reckless speculation and corruption of the financial institutions by suing financial regulators.
Members of Occupy the Securities and Exchange Commission (SEC), the brain trust of the once-robust Occupy Wall Street movement, filed a lawsuit claiming that every federal regulator is criminally liable for the financial collapse.
Individuals named in the suit include Ben Bernanke, chairman of the Board of Governors of the Federal Reserve System, Martin Gruenberg, chairman of the FDIC, Elisse Walter, chair of the SEC, Gary Gensler, chair of the Commodity Futures Trading Commission and Thomas Curry, comptroller of the Office of the Comptroller of the Currency, among others.
“There’s no true systematic accounting from the criminal side for what happened in 2008,” said Akshat Tewary, a member of Occupy the SEC, the working group filing the lawsuit. “Look at the losses that occurred in the banking and financial sector, clearly there should be an appetite for some kind of justice and retribution for wrongs.”
One of the major problems leading to the financial collapse was the proliferation of “liars loans” in the mortgage market. Liars loans were home mortgages banks made without requiring borrowers to provide income verification.
Liars loans grew by 500 percent between 2003 and 2006, becoming almost the most common form of home loan in the United States. This type of widespread mortgage fraud hyperinflated the housing bubble, becoming the main cause of the economic crisis.
The lack of government oversight lead to rampant criminal activity on Wall Street, including mortgage fraud and speculative investment. The current lawsuit names every federal regulator for not exercising necessary oversight of the banks.
Members of Occupy the SEC also claim that sections of the 2010 Dodd-Frank Act that was supposed to reform Wall Street have yet to be enacted by the regulators, a violation of the law. The key component yet to be implemented is the Volcker Rule prohibiting banks from engaging in proprietary trading.
Proprietary trading is a risky form of investment whereby deposits are used to trade on the bank’s own accounts. The U.S. government has investigated the causes of the crisis, but no criminal prosecutions of bank executives have occurred.
The Financial Crisis Inquiry Commission and the U.S. Senate’s Permanent Subcommittee on Investigations both made criminal referrals to the Department of Justice (DOJ) but no arrests have been made in response to the recommendations.
A September 2012 Al-Jazeera report comparing the 2008 meltdown to the savings and loans crisis of the late 1980s shows that the Department of Justice (DOJ) investigated and prosecuted bank executives who stole funds from their institution through fraud. Of the roughly 1,000 indicted during the savings and loans crisis, approximately 800 served prison terms.
“This crisis is roughly 70 times larger than the savings and loan crisis, so you should be seeing an effort absolutely unparalleled in U.S. history. Instead you are seeing an effort that is considerably smaller than the effort made in the savings and loan crisis,” said William Black, a former senior financial regulator.