The reports of wrongdoing by financial firms in the past few years have many people wondering why there haven't been more prosecutions.
According to New York Times reporters Gretchen Morgenson and Louise Story that's a result of new guidelines issued by the Justice Department in 2008. These guidelines allowed prosecutors to take a "softer approach" to corporate crimes and have permitted financial companies to avoid indictments if they agree to investigate and report their own crimes.
The story observes that outsourcing government investigations to the target company is a bad idea. But sometimes the government just doesn't have the resources to investigate important cases. One answer is that Congress needs to increase enforcement budgets so the investigators don't need to ask the criminals to investigate themselves. Another answer is that the investigators can enlist the help of whistleblowers and their attorneys, who have a strong incentive to make sure all of the fraud, not just what the company wants to reveal, is uncovered.