Lawmakers and commentators have lamented the lack of individual accountability for the 2008 financial crisis.  While prosecutors have successfully negotiated large settlements with institutional actors­­­-including Citigroup, JP Morgan Chase, and Bank of America-no high-level bank executive has been successfully prosecuted for the actions (or inactions) that some say caused the "great recession" that the U.S. economy (and psyche) is still recovering from. 

Individual accountability is arguably a strong deterrent against criminal behavior, even at the corporate level.  Indeed, corporate executives have certainly been held accountable in the past: individuals were successfully prosecuted for the junk bond bubble of the 1980s, the savings and loan crisis of the 1990s, and the accounting frauds of the 2000s.

So why not this time? 

According to the government, not for lack of a fraud: the report of the Financial Crisis Inquiry Commission credited the financial crisis at least in part to "a systemic breakdown in accountability and ethics."  Commentators have speculated at length on the possible reasons that corporate executives have not faced criminal prosecution.  Perhaps it is due to the difficulty of proving that high level managers possessed fraudulent intent; perhaps prosecutors believe that juries are more likely to convict a big bad company than an individual officer; or perhaps, as Judge Rakoff suggested in this thought provoking article, government investigators and prosecutors have focused their resources elsewhere: on anti-terrorism at the FBI (the main investigative arm for the DOJ) and on Ponzi-type financial frauds at the SEC. 

Whatever the reason, it has now been over six years since Lehman Brothers filed for bankruptcy protection.  We are now outside the five-year statute of limitations for civil charges (assuming the conduct occurred in 2006 or 2007), but well within the ten-year limitations period for criminal frauds involving financial institutions.  Bank executives, even those who have long left the business and moved on to new endeavors, still wait under the specter of criminal prosecution for conduct that occurred in a period that has received considerable Congressional attention. 

While the window for prosecutions is still wide open, outgoing U. S. Attorney General Eric Holder took the unusual step on February 17 of asking U.S. attorneys to decide within three months whether they intend to bring any charges against bank executives. 

The ultimate effect of Mr. Holder's announcement is not yet clear.  Perhaps the short time limit, along with certain recent high profile losses against individual defendants (including Freshfields client Raoul Weil) will lead to even greater prosecutorial focus on corporate defendants; alternatively, the next U.S. Attorney General may want to step out of Mr. Holder's shadow by pushing instead for more individual liability. 

Either way, if prosecutors do not announce new cases by the end of this deadline, bringing future charges, even if based on new information, may be an uphill battle.  The time limit was publicized as a method to ensure adequate resources are allocated to promising cases (perhaps in an attempt to bolster Mr. Holder's legacy before he leaves office), but may inadvertently work to give current and former bank employees some long-awaited repose.