It doesn’t inspire confidence in the Washington Post that it fails to mention the blockbuster SEC fraud charges against Goldman Sachs in a story about how the Obama administration has failed to file criminal charges against Wall Street.

Nearly 1 1/2 years into Obama’s tenure, despite several cases against mortgage companies whose lending practices contributed to the crisis, the administration has not brought any charges against the big Wall Street banks that took those loans, converted them into toxic securities and pumped them into the world’s financial markets. And law enforcement sources say no such charges are imminent.

The Post is apparently talking about criminal charges, but it doesn’t make that explicit. Here’s the lede:

Since taking office at the height of the financial crisis, President Obama has promised to hold Wall Street accountable for the meltdown. Attorney General Eric H. Holder Jr. reinforced that message in November when he vowed to prosecute Wall Street executives and others responsible for the crisis…

His Justice Department took steps to fulfill that promise this week when it arrested the former chairman of one of the nation’s biggest mortgage firms — the largest crisis-related criminal case — and announced that 1,215 people have been charged with mortgage fraud since March 1. But that success masks the government’s difficulties in the highest-profile investigations: those of Wall Street banks.

Even if it had spelled it out, I don’t know how you write a whole story on this without touching the Goldman civil charges. While it doesn’t mention Fabrice Tourre, it does find a sentence to devote to which floor the FBI’s task force head works on at the Department of Justice (fourth if you’re somehow interested).

If the execution is a bit off, the premise of the piece is not: There’s been a whole lot of rhetoric from Obama and his officials and not much action. It’s good that the Post focuses attention on this. The press has a vital role in creating the climate for prosecutions. This kind of story isn’t quite like a Gretchen Morgenson/Jonathan Glater investigation that exposes specific fraud, but not much is. These this-isn’t-happening stories are useful in keeping officials’ feet to the fire.

The Post explains some of the nuances behind the dearth of Wall Street prosecutions:

Kevin L. Perkins, assistant director for the FBI’s Criminal Investigative Division, said Wall Street and other corporate investigations involve “very highly paid, educated and sophisticated” targets who argue that they warned investors of potential risks. Prosecutors must prove a deliberate intent to defraud.

“Is that a valid defense that makes it hard? From a criminal standpoint, it is, yes,” Perkins said.

This would be where you mention the case against Goldman, which the SEC is able to bring in part because the bar is lower for civil charges.

As the Post mentions, the DOJ just announced it’s bringing a major criminal case against Lee Farkas for what it says was a $1.9 billion fraud. That’s a good sign.

Don’t be surprised if the administration finally gets to the big fish by going after the smaller fish like Farkas first.


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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.