Failed Banks, Few Targets

In the past three years, 322 of the country’s banks, most of them small or midsize, have failed, devouring $634 billion in assets in the process. The scale of the wreckage recalls the savings and loan fiasco of two decades ago, but the calamities differ sharply in terms of liability.

On the criminal front, the S&L crisis led to the prosecution of some 1,850 officers and directors of failed thrifts, and about 1,600 convictions. By contrast, as of mid-January the Federal Deposit Insurance Corporation had referred 233 potential criminal cases to the U.S. Department of Justice (the number lumps bank executives with other alleged wrongdoers). The referrals have only led to two convictions involving a pair of former executives at a small Georgia bank. Why are the scandals so different? Experts say the kind of self-dealing at work in the S&L debacle isn’t an issue now. “What we’ve seen so far is not systematic corruption or malfeasance,” says Ropes & Gray white-collar criminal defense lawyer Randall Bodner.