Nearly seven years since the outbreak of the financial crisis, banks have paid out billions of dollars in settlements for financial misdeeds, but not a single Wall Street executive has been put in jail.
On Wednesday, the US Department of Justice (DOJ) announced a new policy to go after the individuals who have committed financial crimes. It's a sharp divergence from the strategy championed by outgoing Attorney General Eric Holder, which sought to levy fines against banks and financial institutions, but spare executives and others responsible for decision-making from criminal prosecution.
Deputy Attorney General Sally Yates outlined the new approach in a speech at NYU law school on Thursday. The DOJ will now pursue criminals "regardless of whether they commit their crimes on the street corner or in the boardroom," she said. "A crime's a crime."
But, with the five-year statute of limitations for criminal charges stemming from the financial crisis long past, it's unclear if the policy will translate to more corporate accountability.
"It is my belief that the new DOJ stance is a defensive smokescreen to shield itself from widespread criticism," Richard Bowen, a former senior vice president at CitiGroup and mortgage fraud whistleblower, told VICE News.
In 2006, Bowen sounded the alarm that CitiGroup was involved in massive mortgage fraud; he later turned over thousands of pages of documents to the SEC, and met with the DOJ to help build a case against the bank. Last year, CitiGroup settled with the DOJ for $7 billion - but no one at the bank was held criminally responsible.
Bowen thinks the new policy is pure public relations.
"By now all of this is a moot point," he said.
The DOJ, meanwhile, is heralding the policy as a new day for corporate accountability. Laying out the details in a memo addressed to the entire Department of Justice staff, Yates argued that, "one of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing."
She directed attorneys to play hardball with corporations, and to pursue individual executives from the outset of any investigation. The DOJ should not, she said, offer to drop criminal charges against executives in exchange for cooperation.
"Corporations can only commit crimes through flesh-and-blood people," she told the New York Time's on Wednesday. "It's only fair that the people who are responsible for committing those crimes be held accountable."
When asked by VICE News if the policy was an implicit admission of past failures to put corporate criminals behind bars, a DOJ spokesperson declined to comment.
"The new policy guidance is forward-looking," the spokesperson said. "Our goal in putting forward this guidance was to put in place some concrete steps that will ensure that individual accountability is at the heart of our corporate enforcement strategy."
So far, such "individual accountability" has been elusive. Over the last six years, 49 financial institutions have paid out nearly $190 billion in fines and settlements. But only Kareem Serageldin, a mid-level trader at Credit Suisse, has received any jail time for activities linked to mortgage fraud - he's currently serving a 2.5 year sentence.
In fact, the vast majority of the top dogs at financial firms that profited off toxic mortgage-backed securities have been able to ride out the crisis, using shareholder money to pay off the fines leveled by the DOJ. In 2014, JPMorgan paid $13 billion to settle accusations of massive mortgage fraud - one of the largest such settlement in US history. No one went to jail, and the company was not required to admit criminal wrongdoing. A few months later, the board of directors awarded the CEO James Dimon a 74 percent raise.
"Up until now senior executives were basically immunized by paying shareholding funds and that does little to curtail future misconduct," Bartlett Naylor, a former chief of investigations for the US Senate Banking Committee, told VICE News. "In fact, it reinforces bad conduct."
Naylor is now with the advocacy group Public Citizen, and has been a sharp critic of the Obama administration's handling of white-collar crime.
In the wake of the financial crisis, the Justice Department worked closely with banks to hammer out massive financial settlements that skirted around the issue of criminal liability, and instead focused on putting a price tag on misconduct.
The DOJ's post-financial crisis strategy diverge significantly from the approach taken in the wake of the Savings and Loans Crisis of the 1980s where some 1,100 individuals faced criminal prosecution and the heads of several major banks served jail time.
William Black, a renowned former bank regulator who played a key role in exposing the fraud at the center of the Savings and Loan Crisis, called the new memo "desperate" and "farcical.
"Words are cheap. The Department is 4,000 days late and $24.3 trillion short," he wrote in an article for New Economic Perspectives.
Black told VICE News that after the financial crisis he offered to help the DOJ go after the mortgage banks. Instead, he was hired by the government in Iceland, where he helped advise prosecutors who eventually put the heads of the largest Icelandic banks in prison.
"This is an implicit admission that the DOJ committed a great strategic failure," Black said. "But, it's too late - don't expect any big changes."
DOJ officials have long maintained that pursuing settlements allowed the government to extract financial penalties without going through the costly ordeal of a criminal trial, and without causing collateral damage.
"In reaching every charging decision, we must take into account the effect of an indictment on innocent employees and shareholders," Lanny Breuer, then the Assistant Attorney General for the criminal division, explained in 2012. "Those are the kinds of considerations in white-collar crime cases that literally keep me up at night."
In an interview with the Financial Times conducted after he left the DOJ, Holder made a similar point, saying he had no interest in "trying to make examples of people" with jail time.
The new DOJ memo seemed to depart from this sentiment.
"In the short term certain cases against individuals will not provide as robust of a monetary return… pursuing individual action will result in significant long term deterrence," Yates wrote. Though, she also praised Holder for "understanding" that white-collar crimes involved "not just corporate entities" but "also individuals."
Naylor at Public Citizen is cautiously optimistic that the new policy will put white-collar criminals on notice.
"Ideally going forward this will change the prosecutors' playbook," he said. "And that is encouraging"
But those calling for more aggressive white-collar prosecutions are frustrated by the timing of the announcement.
"You could say 'better late than never," Phil Angelides, the chairman of the Financial Crisis Commission, a government task force that investigated the causes of the 2008 economic collapse, said in a phone interview. "But it's very late."
The Commission- which is often called the 9/11 Commission for the great recession - handed over a detailed report to the DOJ in 2011 laying out the scope of the misconduct committed by banks in the lead up to the 2008 crash.
"We thought the prosecutors would pursue it… but they didn't' run very hard or very fast," Angelides said. "The new strategy is encouraging, but it's a tragedy these years went by apparently, without the vigorous investigatory effort to unveil the truth."