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Men who bet the bank and lost owe a debt to society

Last month there were US federal court proceedings against two of the most senior financial industry figures yet since the Wall Street meltdown of 2008.

But will the sentencing of hedge fund billionaire Raj Rajaratnam for insider trading and the arrest of his accomplice, former Goldman Sachs bigwig Rajat Gupta, kick-start a long-awaited 'perp walk' that will send more offenders behind bars?

Or are their prosecutions just superficial window-dressing that conveys a false sense of governmental vigilance, while Wall Street's biggest offenders remain untouched?

Given all that's transpired since 2008, it's easy to forget the full extent of the meltdown-triggering shady dealings in the US mortgage industry - and how much authorities knew about it all beforehand.

Testifying before Congress in 2004, FBI officials warned of an 'epidemic of mortgage fraud' that could trigger a 'financial crisis'. Two years later, the mortgage industry's own fraud watchdogs also flagged widely-used 'stated income' loans - which accepted a mortgage applicant's word alone as proof of income - as an 'open invitation to fraudsters.' Such loans were 90% fraudulent, the watchdogs said.

Yet huge financial institutions like Washington Mutual, Lehman Brothers, Indymac, Citicorp and Countrywide continued to peddle these as valuable investments. These so-called 'Liars' Loans' comprised 33% of all annual mortgages right up until the 2008 collapse.

Defenders of these bankers say such risk taking was legal. In 1999 Congress repealed the 1933 Glass-Steagall Act, which barred commercial banks from investment banking.

Advocates of criminal prosecutions counter that, because many mortgage bankers and financial industry executives actively and aggressively promoted the sale of bogus mortgage-backed securities, they're guilty of criminality.

The Security and Exchange Commission secured a $550m (£344m) settlement from Goldman Sachs and the Federal Housing Finance Administration filed $100bn (£625m) in lawsuits against 17 banks for allegedly selling worthless bundled-mortgages as sound investments.

The only significant criminal conviction has been Lee Farkas, the CEO of Taylor Bean -amp; Whitaker (TBW) - a regional bank in America's southeast. In July he was sentenced to 30 years in jail for mortgage fraud.

Still, almost all of Wall Street's biggest 2008 offenders have escaped unscathed, a reality highlighted by comparing the US Justice Department's efforts to those undertaken during the late 1980s Savings and Loan (S-amp;L) scandal.

In the months following the 2008 bank bailouts, Americans lost $11trillion (£690bn) in stock market investments. After the S-amp;L crisis Americans lost $150bn (£94bn) on the stock markets.

In the S-amp;L case, the Federal Office of Thrift Supervision (OTS), a banking industry overseer, referred 10,000 cases for prosecution. More than 1,000 felony convictions were secured. Yet, even though the cost of the 2008 meltdown dwarfs the S-amp;L scandal, in the last three years OTS hasn't referred a single case for prosecution - in spite of the fact that it oversees banks with $355bn (£209bn) in failed assets.

But if the case of Raj Rajaratnam is any indication, it's doubtful that jail-time will be a life-altering experience for many of the anyhow.

When Rajaratnam is released after serving his 11-year sentence, in spite of having paid $10m in fines, he will still have more than $500m with which to start again.