Will Financial Collapses Result In Prosecutorial “Lynchings”?


With public anger increasing over plunging stock prices and Wall Street “greed,” white-collar defense attorneys are preparing for an inevitable surge in criminal prosecutions, reports the New York Law Journal. Stanley Arkin expects that the anger, hysteria, and economic dislocation fueled by “imprudent credit policies” will inspire indictments that would not have been brought in a “calmer and more dispassionate time.” He added: “There’s a lynching quality that arises in circumstances of extreme dislocation like this.”

Some other defense attorneys disagreed: “I don’t think public clamor for executives’ heads to roll is going to cause prosecutors to bring charges that they otherwise wouldn’t bring,” said Alan Vinegrad, a partner at Covington & Burling and a former federal prosecutor. The Wall Street Journal and Bloomberg News Service said federal prosecutors are investigating whether Lehman Brothers was telling investors that its financial condition was sound at the same time its executives knew the balance sheet was crumbling — a situation that ultimately resulted in bankruptcy.

Link: http://www.law.com/jsp/article.jsp?id=1202425138326

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