Tuesday, May 25, 2010
Claim Protection of Free Speech To Avoid Criminal Prosecution?
Can the First Amendment of our Constitution be used to protect a crime? That is the question for the day. The Credit Rating Agencies have argued that their credit ratings that they placed on mortgage-backed bonds is protected by the First Amendment. I disagree.
Making counterfeit money by that same reasoning should be protected by freedom of the press, again a First Amendment issue. But, what U.S. court would hand down a decision saying that someone printing $100 dollar bills in their basement is protected by freedom of the press?
The investment bankers and the credit rating agencies entered into a mutually beneficial deception of the investing public. Their crime is no less than the crime of counterfeiting. They minted Triple-A bonds that were clearly not Triple-A. Furthermore, there is evidence that by working together to deceive the public, they both stood to gain. The investment bankers sold investors junk bonds at Triple-A prices and yields, and the credit rating agencies saw their earning grow as the market for structured assets grew.
I can not see how a judge could find for the credit rating agencies on First Amendment grounds. It is clear to anyone with an ounce of common sense that using the Free Speech clause to protect a crime, such as counterfeit bond ratings to fleece investors of their money, should not be protected by the Constitution. If this reasoning is up held, I would not be surprised if other free speech like crimes come to the surface. Create a swindle and wrap yourself in the free speech clause to protect yourself from criminal prosecution will become all the rage.