Comment by leereeves
6 months ago
I believe a similar concept exists in finance, as part of fiduciary duty. It's called duty of care in that context.
"The American Law Institute’s Principles of Corporate Governance defines the duty of care as the duty by which a corporate director or officer is required to perform their functions in good faith; in a manner that they reasonably believe to be in the best interests of the corporation; and with the care that an ordinarily prudent person would reasonably be expected to exercise in a like position and under similar circumstances (negligence standard)."
Again, that's a civil issue not criminal. In theory some lenders might have been able to file civil lawsuits against some of their own employees to claw back part of their bonuses or whatever, but that would have been pointless.
You're right, it's civil rather than criminal, but in the case of some investment companies, like those that sold mortgage-backed securities, it can be enforced by the SEC.
https://www.law.cornell.edu/uscode/text/15/80a-35
That's just one example. I expect that, had they wanted to, the government could have found many applicable laws to go after those responsible for the financial crisis.