THE BURNED OVER DISTRICT

Phil Angelides, head of the Financial Crisis Inquiry Commission, has the chutzpah to ask why, after delivering clear evidence of financial fraud, no prosecutions of any note have taken place.

LAST week, Attorney General Eric H. Holder Jr. proclaimed in a speech that when it comes to fighting financial fraud, the Obama administration’s “record of success has been nothing less than historic.” Such self-congratulation is not only premature, but it also reveals a troubling lack of understanding about what is required to win the war against financial wrongdoing.

Four years after the disintegration of the financial system, Americans have, rightfully, a gnawing feeling that justice has not been served. Claims of financial fraud against companies like Citigroup and Bank of America have been settled for pennies on the dollar, with no admission of wrongdoing. Executives who ran companies that made, packaged and sold trillions of dollars in toxic mortgages and mortgage-backed securities remain largely unscathed...

The Financial Crisis Inquiry Commission’s report contains evidence about Clayton Holdings, a company hired by more than 20 major financial institutions to perform “due diligence” on mortgage loans those companies were buying, bundling and selling. Clayton sampled 2 to 3 percent of those mortgages and found a significant number of defective loans. Yet the other 97 percent were not sampled, and that fact and the information about loan defects were never disclosed to investors — “raising the question,” the report noted, “of whether the disclosures were materially misleading, in violation of securities laws.”

In numerous court cases, plaintiffs, including the Federal Housing Finance Agency, have cited this evidence to support their claims of fraud and misrepresentation. But, inexplicably, there is no indication that the Justice Department promptly convened a high-level investigation to thoroughly examine who knew what when at these banks. In contrast, after the savings-and-loan debacle of the late 1980s, more than 1,000 bank and thrift executives were convicted of felonies. But today the rate of federal prosecutions for financial fraud is less than half of what it was then.

The nerve of him, calling out Eric Holder's failures while Holder is preening over his imaginary success.