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Illustration: Rebecca Zisser/Axios

No major Wall Street, real estate or insurance executives were jailed for their roles in nearly destroying the U.S. economy.

The big picture: Kevin Puvalowski, a former federal prosecutor, says that the financial crisis was caused by weak regulation combined with unwise decisions, but not ones that were necessarily illegal.

  • Jesse Eisinger, author of a book on the subject, places much of the blame on prosecutorial cowardice, in the wake of having convictions overturned in cases related to Enron and Arthur Andersen.

Many still question the light touch. Richard Bowen, a former employee in Citigroup's mortgage unit, tells Axios he provided 1,000 pages of documents to the SEC and spoke to prosecutors about certifications of low-quality mortgages that were sold to investors, Freddie Mac, and Fannie Mae. But he doesn't know what was ever done with his information.

The only institution indicted in the crisis' aftermath was Abacus Federal Savings Bank, which was charged with selling fraudulent loans to Fannie Mae — although Abacus's default rates were minuscule compared to the national delinquency rate.

  • Abacus was an easy target, without armies of lawyers or millions of dollars for a defense.
  • "Without question, the Manhattan [district attorney's] office wanted to indict a bank in light of the financial crisis. That was a significant factor here," says Puvalowski, who represented Abacus after he transitioned to private practice.
  • Three years after the indictment, Abacus (and its executives charged in connection with the case) was acquitted of all charges.

The government also lost a case against two Bear Stearns executives who were accused of lying to investors about investments in subprime mortgages, and it also dropped criminal charges against former Countrywide CEO Angelo Mozilo.

Go deeper

Caitlin Owens, author of Vitals
8 mins ago - Health

America’s biggest hospitals vs. their patients

Expand chart
Data: JHU; Chart: Will Chase/Axios

More than a quarter of the 100 U.S. hospitals with the highest revenue sued patients over unpaid medical bills between 2018 and mid-2020, according to new research by Johns Hopkins University provided exclusively to Axios.

Why it matters: The report suggests that, rather than being an anomaly, patient lawsuits are relatively common across the country and among the largest providers.

Updated 3 hours ago - World

American men plead guilty to helping former Nissan chair escape Japan

Carlos Ghosn, former Nissan chair, during a news conference in Jounieh, Lebanon, last September. Photo: Hasan Shaaban/Bloomberg via Getty Images

Americans Michael Taylor and Peter Taylor pleaded guilty in a Tokyo court Monday to helping former Nissan chair Carlos Ghosn escape Japan in a box aboard a plane in 2019, per the Wall Street Journal.

The big picture: Ghosn was awaiting trial in Tokyo on financial misconduct charges following his 2018 arrest when he fled to Lebanon. He denies any wrongdoing.

Reports: Trump DOJ subpoenaed Apple for records of WH counsel Don McGahn

Former White House counsel Don McGahn leaves Capitol Hill after a closed-door meeting with the House Judiciary Committee on June 4, 2021 in Washington, DC. Photo: Drew Angerer/Getty Images

Apple told former Trump administration White House counsel Don McGahn last month that the Department of Justice secretly subpoenaed information about accounts of his in 2018, the New York Times first reported Sunday.

Why it matters: Although it's unclear why the DOJ took the action, such a move against a senior lawyer representing the presidency is highly unusual.