It’s been five years since the 2008 financial crisis — which led to America’s worst economic downturn since the Great Depression of the 1930s — and the Securities and Exchange Commission is still sorting out the financial mess. The long-term consequences of the recession aren’t yet known, but the immediate fallout threw 5.5 million people out of work and lead to nearly 4 million home foreclosures across the U.S.

To the SEC’s credit, the fines and settlements keep rolling in — $296.9 million from JP Morgan last year and $50 million from UBS last month, to name a few. Financial regulators tout these as steps in the right direction, part of an effort that has helped recover more than $1.53 billion as of Sept. 1. Many commentators note, however, that few of the top executives who knowingly imperiled the global economy are serving prison sentences.

The lack of prosecutions is largely due to the fact that many Wall Street executives now have jobs in Washington. The full extent of this so-called “revolving door” was reported by the Project on Government Oversight (POGO) in March, showing that Wall Street bankers are actually given bonuses if they leave their high-paying jobs in finance and take jobs in Washington.

“It’s not that federal government tried to prosecute a bunch of them but lost the cases. There were no serious efforts at criminal prosecutions at all,” wrote Neil Irwin in a recent article for the Washington Post. “It’s shocking that for a crisis that drove the global economy off a cliff, caused millions of people to lose their homes and generally spread mass human misery to almost every corner of the earth there is no defining prosecution.”

Recent findings

Part of the problem stems from the fact that financial misconduct was much more widespread than in any previous financial crisis.

A two-year investigation by the U.S. Senate Permanent Subcommittee on Investigations examining 56 million pages of memos, documents, prospectuses and emails lead to the 646-page report published in 2011, titled “Wall Street and the Financial Crisis: Anatomy of a Financial Collapse.”

The findings show that not only was the crisis entirely avoidable, but it was largely created by high risk mortgage lending, the failure of regulators to stop such practices, inflated credit ratings, and abuses of the system by investment banks.

Even with widespread abuses found throughout Wall Street finances leading up to 2008, penalizing banks has taken years. The SEC, tasked with overseeing financial transactions in the U.S., reports that as of Sept. 1, banks have paid fines and refunded lost investments totaling $1.53 billion.

Many of the settlements and charges continue through the end of this year. The SEC charged Bank of America and two subsidiaries last month with defrauding investors through residential mortgage-backed securities by failing to disclose key risks and misrepresenting facts about the underlying mortgages.

The SEC charged UBS with violating security laws while structuring and marketing a collateralized debt obligation (CDO) by failing to disclose that it retained millions of dollars in upfront cash it had received in the course of acquiring collateral for the CDO. UBS agreed to pay nearly $50 million to settle the SEC’s charges.

This is a pittance compared to the $550 million Goldman Sachs paid in a 2010 settlement. The SEC charged that firm with defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.

The revolving door

This may sound like some progress has been made toward preventing another crisis, but some question whether fines are enough to deter would-be financial fraudsters.

“The crisis exposed some outright fraudsters who are now in the slammer, such as Bernie Madoff and Allen Stanford. And, yes, major banks have been working through billions of dollars in civil settlements for shady behavior in the runup to the crisis,” Irwin writes. “[But] no man or woman who led one of the firms directly culpable for the catastrophe has been put in a prison-orange jumpsuit.”

Compare this with your run-of-the-mill Grand Larceny charge in New York, a theft of any sum more than $1,000. It’s treated as a Class B felony and is punishable by up to 25 years in prison.

Why have the SEC and the FBI failed to prosecute the biggest offenders? Part of the problem stems from the fact that many of the top government finance-related positions are staffed by former Wall Street executives.

For example, Morgan Stanley’s executives are eligible to receive a bonus — one they would normally would forfeit for leaving the company prematurely — if they leave to work for a “governmental department or agency, self-regulatory agency or other public service employer,” according to a company pay plan filed last year.

Similarly, JPMorgan gives bonuses to executives who leave to run a “bona fide full-time campaign” for public office. Their name “must be on the primary or final public ballot for the election” in order to qualify, according to a company document filed last month.

POGO researchers conclude from these findings, “Companies seem to be giving a special deal to executives who become government officials. In exchange, the companies may end up with friends in high places who understand their business, sympathize with it, and can craft policies in its favor.”

A look back at the savings and loans crisis

Wall Street has not always been punished so lightly for its crimes. A look back at the savings and loan crisis of the 1980s and 1990s shows that thousands of bankers did the perp walk and hundreds served time in prison for their crimes.

Al Jazeera reports that the savings and loan scandal cost taxpayers roughly $160 billion. The crisis was created largely through the deregulation of the financial industry, enabling bank executives to engage in risky and fraudulent investments with federally insured deposits.

The fallout from that financial crisis led to the referral of 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Some of the better known executives who served time in jail were Charles H. Keating Jr. of Lincoln Savings and Loan in Arizona and David Paul of Centrust Bank in Florida.

Keating spent less than five years in federal prison and was released early after many of his original convictions were overturned. He pleaded guilty to a less extensive collection of fraud charges after thousands of his investors lost an accumulative $285 million.

For comparison, the time he spent in prison is roughly equivalent to the time a repeat petty thief would face in California for stealing sums of less than $1,000.

William Black, who played a key role in prosecuting bank executives for fraud during the Savings and Loan crisis, told Al Jazeera that the financial impact of the 2008 meltdown “is roughly 70 times larger.”

According to Black, the investigation and prosecution of a financial collapse that dwarfs the savings and loans crisis should lead to a prosecutorial effort “that is absolutely unparalleled in U.S history.

“Instead,” he says, “you are seeing an effort that is considerably smaller.”