David Zaring has a question:

Why Aren't More Bankers Going To Jail?, by David Zaring: Jesse Eisenger and Andrew Ross Sorkin have both written about the surprising lack of convictions in the wake of the financial crisis. Surely someone made public statements of confidence immediately before the bank collapsed?

I'm as surprised as anyone, mostly on political economy grounds. You've heard before on this blog some concern about the criminalization of corporate governance, and in my view, even the prosecutors of Enron could have done a better job explaining why the CEO and Chairman had to walk the plank... But they did go to jail, so did S&L executives numbering in the four figures - and the S&L crisis is one that many people blame more on Paul Volcker than on thousands of surprising concurrent cases of fraud.

But the SEC and DOJ don't always win these cases, as Peter Henning reports. He thinks that these cases really are difficult to win. ...

The [Ninth Circuit last Friday] overturned the conviction of Prabhat Goyal, the former chief financial officer of Network Associates, on 15 counts of securities fraud, making false filings with the Securities and Exchange Commission and making false statements to the company’s auditors. The court concluded that the government simply failed to produce evidence to back up its claims that he intentionally inflated revenue and misled the accountants.

So maybe this kind of judicial reception, and the jury in Bear Stearns test case that failed, has made the government gun shy. Maybe New York defense lawyers are worth every penny, or maybe DC government types can't imagine throwing a wide swath of the financial community in jail. Maybe Madoff and Galleon distracted everyone. But I remain surprised. There's the flexible statutes available to the government, surely one could stop at AIG, Lehman, and Bear and satisfy the public ... My own tentative view is that it could be that for really high-ranking people to go to jail, someone has to have done something obviously criminal. So Lay and Skilling had Andy Fastow, Michael Milken had Ivan Boesky. But the out and out crook, for whatever reason has not turned up yet, which means that all the captains who went down with their Titanics can breath a bit more easily.

But that's speculation in the service of being as surprised as Sorkin et al, without necessarily wanting a parade of handcuffs.