The Message in a Crooked Broker's Reduced Sentence
The government claimed losses exceeded $1.12 billion and asked for a sentence of 45 years in prison, plus significant monetary penalties. But Butler caught a major break. U.S. District Court Judge Jack Weinstein sentenced him to only five years in prison and fined him $5 million.
Judge Weinstein isn't your run-of-the-mill jurist. He has been a federal judge for 43 years, is a prolific author and one of the most experienced and respected judges in this country. After the jury returned its guilty verdict, Judge Weinstein signaled his concern about allocating all of the blame for these misdeeds to Butler. Said Weinstein: "What becomes evident in a trial like the present one, and in recent mortgage fraud cases, is how pernicious and pervasive is the culture of corruption" in the securities industry.
He repeated these views on Friday, noting the reduced sentence took into consideration "the pernicious and pervasive culture of corruption in the financial-services industry," which is "beset by avarice."
Wake-Up Call to Investors
Weinstein left no doubt about his view of Credit Suisse's culpability, stating that "[T]he blame for this condition is shared not only by individual defendants like Butler, but also the institutions that employ them."
This judicial validation of the pervasive greed and dishonesty in the securities industry should be a wake-up call to investors. It's difficult to understand why investors continue to trust their assets to members of this industry. It's bad enough that brokers generally lack the expertise to manage your assets. It's worse that, if you're a victim of broker misconduct, the mandatory, industry-run arbitration process is rigged to ensure you won't recover any meaningful portion of your losses.
I appreciate Judge Weinstein taking corruption and greed in the securities industry into account as an argument against a long prison sentence for Butler. What's your argument for continuing to place your trust in the securities industry?