If banks sell investments to their customers telling them they are good and at the same time invest their own money in bets that the investments are bad, that is a crime. Exactly what category of crime is not immediately obvious to those of us who are not lawyers. It is obvious to lawyers, however, and the government may or may not get around to prosecuting the banks.
Legal crime is also in my family, and I wonder how much my experience is unique, how far business life has corrupted private life. Here is my family story:
One of my brothers, his name is Todd, was the executor of our mother's estate. His full name is Todd Miller. He is an architect in Ventnor, New Jersey. The estate wasn't very large because Todd and my other brother had earlier transferred most of the family property into their two names to avoid paying inheritance tax. When our mother died Todd wrote to me that though I would be the only beneficiary there was hardly any money left after his expenses, and if I demanded an accounting he would pay his lawyer to take the entire estate in his legal fees. That is what he did. Legal crime.
With immense banks doing it in an immense scale you can be pretty sure no one bothers with the legal crime of a Ventnor, New Jersey architect like Todd Miller, A.I.A. of QMA Design & Build.
But legal crimes sometimes do get corrected. Even big ones. The actual present Constitution of the United states was one such legal crime. The Articles of Confederation required the vote of all the state congresses for its amendment. The Constitution, however, required ratification of only 10 out of the 13 states, and by popular vote, not by the state congresses. It was "legal", but not at all if you look into it, but who was looking into it?
However much of the crime was atoned for by the 1st and other amendments in the next years. Now the U.S. Government has also gotten involved in my own family's small legal crime, and maybe there will be a little correction.
The American Embassy is making me an emergency repatriation loan. To qualify you have to provide the names of people who you have contacted and will not help you return to the U.S. from abroad. I am abroad. In Budapest. I gave them the names of my brothers.
The government very, very much does not want to make this kind of loan, and the Embassy has made it absolutely clear to me. I have mentioned to the Embassy my brother's legal crime and suggested they collect for me. They scheduled a telephone call between me and my brother to occur on the Embassy grounds the next week.
The telephone call is not a success. It's been 5, 6 years. My brother makes small talk. I answer politely and wait for him to offer to return the money, not force the government to make the emergency loan. He doesn't. He suggests I stay in Europe because it is cheaper. He seems to have no understanding that everyone is not a millionaire like himself, and that being in a cheaper place with no money is not an advantage.
Probably the banks are the same way. Everyone is a millionaire and it's all a game.