Last week, a small but significant story almost got lost amid the larger revelations about several bank collapses. Carrie Tolstedt, the former senior executive at Wells Fargo in charge of that bank’s systematic looting of its customers via fake accounts and spurious extraction of fees, agreed to a plea bargain that could give her a prison sentence of up to 16 months. Sentencing will be delayed until April.

This case is significant because it is an exception to the government’s abject failure over two decades to bring individual corporate criminals to justice. After the 2008 financial collapse, the deeper scandal was that all the senior banking executives, who were responsible for gross frauds that pulverized the economy and put millions out of work and into foreclosure, escaped criminal prosecution. (Bernie Madoff did time for an old-fashioned Ponzi scheme that was unrelated to the systemic scams that crashed the system in 2008.) Instead, the government agreed to settlements that fined banks, without prosecutions of the executives responsible.

So if the Justice Department has opened the door to criminal prosecutions of individual bankers, that is a major and welcome change.

"Until bank executives are held personally accountable for their criminal actions, including the prospect of prison time, working people will continue to pay the price," Sen. Elizabeth Warren (D-MA) told me. "We will better protect consumers in the future with Wells Fargo’s executives facing justice for one of the largest financial frauds in American history."

The prosecution is very timely, given that several top executives at the large regional banks currently in the headlines used their privileged insider information to sell bank stock, well before their banks’ precarious condition became generally known. That is criminal behavior, and it cries out for criminal prosecution.

Specifically, Greg Becker, CEO of Silicon Valley Bank, sold $3.6 million worth of shares in the bank on February 27, 11 days before SVB was shut down by the FDIC as insolvent. And several top executives at First Republic Bank, another collapsed bank, sold almost $12 million worth of their stock in the two months before the crash.

But one jailed banker does not translate into a reversal of the long-standing lack of accountability for corporate crime. The Biden administration has an opportunity, amid the bank turmoil, to show a sustained commitment to executive prosecutions. So far, there’s scant evidence that they will do so.

>> Read the full story at prospect.org