Not to mention that the volume of discovery materials is so huge that it costs a fortune in both hourly wages and time to comb through it, and lack of resources has often been a problem at the DoJ; plus, with such a huge volume of evidence to sift through, the procedural arguments over what is admissible and so on and can be strung out for years on end.

I think a lot of commenters here don't appreciate that prosecuting a large bank involves sifting through literally tens of millions of documents looking for patterns of intentionality, which as you say is very hard to prove, and where the subjects of the investigations in question know it's hard to prove. Nobody gets anywhere in the financial industry without a very good knowledge of securities law, whereas it's highly unlikely the teachers in Atlanta didn't cover up their malfeasance very effectively and their defense could almost be summed up as 'what's the big deal?'.

That said, I think the lack of prosecutions was partly political. If the administration had gone nuclear on Wall Street as soon as it came into office (which was when anti-financial sentiment was at its peak) then it would have laid waste to the US financial industry and could have caused a far worse financial and economic collapse than the one we experience. It's no good pointing to things like the S&L crisis as many people do; that was a different, and much stricter regulatory environment. The reason (IMHO) that the financial crisis was so severe was that we deregulated the financial industry heavily in the late 1990s, and so a great many of the systemically risky activities that eventually proved unsustainable were not illegal. It was assumed when Glass-Steagall was dismantled that the market would flush out excessively risky players because too much risk is bad for business. But in a classic case of the market remaining irrational longer then any one participant can remain solvent, the big banks became so leveraged, and their retail and investment arms so entangled, that allowing market forces to operate in late 2008 would have meant the collapse of the payments system. A similar problem obtained after the Great depression; hardly anyone went to jail because although everyone agreed it was a massive disaster, it was a product of hubris rather than malice. See http://www.pbs.org/wgbh/pages/frontline/business-economy-fin... for a simple overview of the situation.

There was a lot of bloodletting in the government - not in terms of people going to jail, but in terms of agencies being dismantled or massively reorganized. Agencies like the Office of Thrift Supervision, whose income derived entirely from regulatory fees and so had every incentive to keep as many banks in existence as possible, were shut down completely. Instead we have the Consumer Financial Protection Bureau, and a mass of new investment compliance requirements under the Dodd-Frank legislation...a bit like the way national security was massively reorganized after the 9/11 incident so that we got the Department of Homeland Security and a ton of new anti-terrorism legislation. Unfortunately I don't think these reorganizations have made us significantly safer; they were well-intentioned but IMHO simply shifted the risk around and substituted elaborate and very expensive compliance regimes for true structural reform. With hindsight, it would have been a lot better if Obama's administration had a) siezed the political momentum that swept him into office to reinstitute the relatively simple Glass-Steagall regulatory regime, b) required the megabanks like Citi, BofA etc. to demerge their retail and investment arms in short order, and c) encouraged large numbers of bankers to take early retirement and leave ethe industry forever or expect 4 years of legal harrassment - and no, I don't think the last suggestion is good law, but it might nevertheless have been an appropriate exercise of political power.

The thing is, if you look at how the industry has been treated from a right-wing standpoint, the administration is engaged in an apparently never-ending shakedown of Wall Street motivated by the President's ardent desire to destroy capitalism. There are lots of people out there who think the financial crisis was just good capitalism and so what if a lot of people wound up losing their homes, they didn't deserve them anyway because they were losers - asin Rick Santelli's (in)famous rant fromt he floor of the Chicago Mercantile Exchange that's often credited with launching the Tea Party movement: http://opinionator.blogs.nytimes.com/2009/02/20/rick-santell... Let's not forget that this was in February 2009, after Obama had been in office less than a month. His administration has faced angry and arguably militant opposition towards its reform efforts from the very beginning, because there's a large reactionary contingent that considers the Democratic party in general and Obama in particular as agents of communism (there's a kind of reactionary foolishness on the left too, that thinks it's OK to just jack up taxes, confiscate wealth, and hold show trials - but IMHO that's a smaller and less powerful demographic). So arguably, the current regulatory regime is the result of an attempt to minimize political as well as fiscal instability.