on the other hand, arthur anderson was a recidivist firm. not only the bad books of enron but also waste management, sunbeam. they were recidivists and they destroyed documents. so when you confront this, the prosecutors need to mete out justice. then they go after arthur anderson, the famous accounting firm. they realized and lost the ability to prosecute the people at the top echelons of corporate america. they can get small fries but not the ceos and cfos of the biggest corporations in america. what is interesting, it feeds on itself. so the crash happens, government goes into belt tightening mode, right? so fbi has dozens of agents. the postal service has, right? >> yeah, they had an elite unit in manhattan that did complex financial investigations. that got wound up. the department of justice had a hiring freeze so they couldn't back fill positions. so there's been a terrible resource constraint through the department of justice just at the moment when they really needed to gear up. not only had they had problems and fiascos, they had t

on the other hand, arthur anderson was a resyd vis firm. only the bad books of enron but also waste management, sunbeam. they were recidivists and they destroyed documents. so when you confront were resid. and they destroyed documents. when you confront this, prosecutors need to meet out justice. so there's blow back, it slings the other way. and prosecutors lose their edge because just getting a settlement is a career went and you never have to go into court and learn how to get a guilty verdict. >> yes, it's been an insidus b i biproduct. so once they figure they really can't go after corporations, they tried to shift to go after individuals but only a series of fiascos and mistakes. they realized and lost the ability to prosecute the people at the top echelons of corporate america. they can get small fries but not the ceos and cfos of the biggest corporations in america. what is interesting, it feeds on itself. so the crash happens, government goes into belt tightening mode, right? so fbi has dozens of agents. the postal service has, rig

following arthur andersen when they indicted arthur anderson, that was done in the bush administration scandal because he was the accounting firm. they just got so much flack for that, they don't have the guts to put a bank out of business even if it did pretty reprehensible stuff. liz: thank you. the closing bell will ring. it is back to the future for google and the home delivery wars. i do love this video, it makes me laugh. we will show you how google will turn up the heat on amazon and ebay. interesting story. when you're sitting down with the richest people in the planet, you want to pay attention and ask the big questions. the revealinrevealing interviewn buffett and bill gates talked what everything from the latest technology trends to the future of the newspaper industry. >> i am from toronto, canada. i am a shareholder of berkshire hathaway. >> go, liz claman. >> i'm ceo of oriental trading companies, i am excited that they were the winners of the company with the largest number of people in the run. i ys say be thman with the plan but with less ergy, moodiness, i had to do s

. >> arthur anderson. somehow the government has carved out a some sort -- i mean the government. the government can't tell an institution it's not supposed to deal with a guilty party that they should deal with a guilty party. >> went to great lengths here whether eric holder or loss ski in new york state taking in 700 plus million of fines that will go to new york state, maybe help pay for pre-k. >> easy come, easy go. after all the things we heard about if you plead guilty, it didn't matter and the stock goes higher and we live to play again, is that the deal some. >> i think that is. now listen, the authorities can say hey, we criminally charged and convicted, if you will, not in a court of law, but a criminal plea -- >> ceo stays. >> from a bank which did not occur during the financial crisis, right? so you can put that on the wall. but at the same time ceo stays, institution remains. doubtful they will lose many customers as a result of this. >> well that's -- >> gain some customers. >> that is like -- that's a big deal. like no. i mean i know they worked hard to get this pl

arthur anderson. >> a lot of fallout.--ds of people losing their jobs. >> we do not know what will happen if they do indict one of the banks. if they do, what is the fallout from that? that is where you see a lot of controversy and debate over whether or not it should be the way forward for how prosecutors are treating the cases. >> we have some idea. i think we know prosecutors are working with the regulatory authorities so that any unintended consequences are avoided. there is always a wild card, which is a person who have not necessarily thought of, a regulator in north dakota who can decide to do something with a consequence no one thought of before hand. i think the regulators are pretty as possible and thoughtful in terms of what they are intending to do. being thoughtful and very intentional when they go after foreign banks here? are talking about a swiss bank and french bank, no american bank. >> that is very true. another issue is these particular cases do not have anything to do with the financial crisis is what

guest: yes, one of the seminal cases, well there were 2, 1 is arthur anderson. arthur andersen was the accounting firm that enabled and run, and it was a recidivist firm. it had health accounting fraudsters like waste management and sunbeam and had settled for notional amounts of money, almost the cost of doing business. in fact, they even thought of it as a cost of doing business, which is completely anathema to preventing corporate crime. intron, arthurof andersen partners destroyed documents, and the department of justice felt it had no choice and indicted the firm. after the indictment, the firm went out of business. it put tens of thousands of people on the street, and almost immediately, prosecutors, some prosecutors and many people thought that this had been a disastrous mistake, an overreach, and subsequently, the supreme court for somewhat technical reasons overturned the conviction. they did not say arthur andersen was in a thing, but they did say that the conviction was wrong. so the department of justice took a lesson from this and the lesson was -- w

guest: yes, one of the seminal cases, well there were 2, 1 is arthur anderson.thur andersen was the accounting firm that enabled and run, and it was a recidivist firm. it had health accounting fraudsters like waste management and sunbeam and had settled for notional amounts of money, almost the cost of doing business. in fact, they even thought of it as a cost of doing business, which is completely anathema to preventing corporate crime. intron, arthurof andersen partners destroyed documents, and the department of justice felt it had no choice and indicted the firm. after the indictment, the firm went out of business. it put tens of thousands of people on the street, and almost immediately, prosecutors, some prosecutors and many people thought that this had been a disastrous mistake, an overreach, and subsequently, the supreme court for somewhat technical reasons overturned the conviction. they did not say arthur andersen was in a thing, but they did say that the conviction was wrong. so the department of justice took a lesson from this and the lesson was -- we

shot arthur anderson down. 80,000 people lost their jobs.he conviction was overturned. >> why did eric holder say that? i am not unmindful of the damage that can be done. >> i think to justify. normally, the justice department is heavy-handed. they will charge white-collar criminal defendant with more than they think they can actually prove so that they have a bargaining position. for him to say here is why we are holding back, it damages the system. charles: they say that wall street is guilty. the president is out right every time. >> the large story in yesterday's sunday "new york times." the story of a banker. stuart: i have to get to these. you cannot take someone to jail and a financial situation unless they are convicted of fraud. this security is worth x number of dollars and it is not. this is totally political. attorney general says this six months before the election. people want to see guys in handcuffs go to prison. >> it is unethical. it is criminal in and of itself, but it is not. there is no recourse. >> i thought they though

consequences to that occurring, we have seen what those are in the past with companies like drexel and arthur andersonhlight the interplay between the various agencies. ultimately, as long as credit atsse is as effectively doing business with senior management being allowed to stay in place -- which does not typically happen in the settlements -- that is the message to the shareholders, that the company will be able to continue doing its business. that its business direction is as directed. >> jacob, thank you so much. >> as we continue this story on financials, ellen zentner joins us from morgan stanley. of course, she cannot comment on the banking industry, she will leave that to mr. gorman, but it is critical to have a sound financial system. that was at the heart of ben bernanke's research years ago. absolutely. a sound financial system is critical to the proper functioning of the economy. that is why financial stability remains a big issue today and something that is hotly debated. >> read the emotion yesterday ben bernanke traveling to texas to give a speech. we have to figure out how he will sp

something prosecutors have avoided since the toppling of arthur anderson and while folks may think theree charges brought state side, this european bank is a very major one and it is a tough stance by the justice department. >> did we think it would be credit suisse, so focused on the u.s. still prosecuting to some extent the financial crisis or various other things with regard to what's happening in the 4x market. wondering if this doesn't catch people by surprise. >> with some of those situations you have to prove intent and i don't think prosecutors can prove that banks like bank of america, citigroup were proven to defraud. this is not exactly related to the financial crisis so while it is a marquee instance of this happening, we did get a sliver of a guilty plea when jpmorgan did admit some guilt but that was to the s.e.c. and on a civil basis so we haven't seen something of this and it doesn't relate to the financial crisis. >> there's a look at shares of credit suisse which do appear to be moving slightly lower. we'll be streaming eric holder's press conference live on cnbc.com at

guest: yes, one of the seminal cases, well there were 2, 1 is arthur anderson. r andersen was the accounting firm that enabled and run, and it was a recidivist firm. it had health accounting fraudsters like waste management and sunbeam and had settled for notional amounts of money, almost the cost of doing business. in fact, they even thought of it as a cost of doing business, which is completely anathema to preventing corporate crime. intron, arthurof andersen partners destroyed documents, and the department of justice felt it had no choice and indicted the firm. after the indictment, the firm went out of business. it put tens of thousands of people on the street, and almost immediately, prosecutors, some prosecutors and many people thought that this had been a disastrous mistake, an overreach, and subsequently, the supreme court for somewhat technical reasons overturned the conviction. they did not say arthur andersen was in a thing, but they did say that the conviction was wrong. so the department of justice took a lesson from this and the lesson was -- we sho