By Nate Raymond
NEW YORK, Nov 12 (Reuters) - The federal judge who oversaw the recent civil fraud trial against Bank of America Corp criticized the U.S. Department of Justice on Tuesday for failing to prosecute high-level executives over the financial crisis.
U.S. District Judge Jed Rakoff of Manhattan said while companies have been prosecuted for causing the 2007-2009 financial meltdown, Wall Street executives have escaped justice.
"The failure of the government to bring to justice those responsible for such a massive fraud speaks greatly to weaknesses in our prosecutorial system that need to be addressed," Rakoff said.
Rakoff, who was appointed by President Bill Clinton in 1996, blamed the lack of criminal cases on a shortage of investigatory resources coupled with an over-emphasis on bringing cases against companies rather than individuals.
Rakoff's critique drew a quick reaction from the Justice Department, where a spokeswoman said top prosecutors are "aggressively working" on several ongoing investigations.
"No individual or institution is above the law and we will continue to follow the evidence where it leads to hold the appropriate people and institutions accountable," Adora Andy Jenkins, a department spokeswoman, said in an email.
The Justice Department this year brought two civil fraud cases against Bank of America in connection with the sale of mortgage securities.
In another case, a federal jury in Rakoff's court last month found Bank of America and a mid-level executive liable for fraud over defective loans Countrywide Financial Corp sold to Fannie Mae and Freddie Mac. The Justice Department on Friday asked Rakoff to penalize the company $863.6 million.
The department also has been engaged in talks with JPMorgan Chase & Co about a potential $13 billion settlement resolving mortgage securities probes.
'BRING THE CASES YOU CAN'
Nevertheless, federal authorities remain on the defensive for not successfully bringing criminal cases against top executives at the banks that cobbled together the complex mortgage products at the heart of the crisis.
U.S. Attorney Preet Bharara, asked at another conference in New York on Tuesday why prosecutors had not brought charges against executives at Lehman Brothers Holdings Inc after the bank collapsed in 2008, responded: "You bring the cases you can based on the evidence you have."
Rakoff has previously tended to direct his criticisms at the U.S. Securities and Exchange Commission rather than the Justice Department. In 2011, he rejected a $285 million settlement between the SEC and Citigroup Inc for being too lenient.