therefore they have failed in their fiduciary duty to their depositors and investors.
Not a lawyer, but isn’t that a criminal offense.
It is if they knew about these issues and then signed the earnings statements, it is.
Remember, Sarbanes-Oxley has criminalized CEO’s and CFO’s signing off on financial statements that they know are not correct. There are criminal penalties now for a CEO and/or CFO signing off on statements made to the SEC concerning financials of a company when they know there are misrepresentations being made.
The trouble is, this law, like so many others, is not being enforced. We supposedly passed SarbOx into law in 2002 in the way of the Enron scandal to prevent it from happening again. Well, it has happened again, only in a much larger, systemic way in the banking sector.
There are huge opportunities for the SEC making criminal referrals out of the 2008 melt-down if they’d use SarbOx, because there’s no question that the CEO’s and CFO’s knew that their financials were BS. Heck, when Erin Callan could not keep a straight face on a phone call, that was effectively the beginning of the end for Lehman. She should have been charged, because she clearly knew that their financials were not in order as the short-sellers were hammering her with questions.
Same deal with the Madoff scandal. Billions of dollars were being flung around the banking system by Madoff... and bankers didn’t ask questions why these large amounts were being shell-gamed?
As in so many other areas of the law, we don’t need new laws. All we need to do is enforce the ones we have. Sadly, the bankers have received a “get out of any inconvenient questions free!” card from the DNC and GOP.