One of the rules of financial crises is that some business executives end up doing time after they happen.  You can ask yourself if the punished executives are chosen through a fair process, whether other executives avoid prosecution for essentially the same conduct, and so on, but:

During the Savings and Loan bailout 20 years ago, federal prosecutors brought more than 600 cases against 1,000 defendants.

and Sorkin:

It is hard to imagine that taxpayers would spend $700 billion (or any amount) to bail out Wall Street and the economy without some big-name executive going to jail. For better or worse, it is the way our society works.

I don't do white collar, but ex-post white collar tends to be part of the bureaucratic response, and I do do bureaucracy.  Who is going to be the villain of this crisis, and who should lawyer up?  It's pure speculation, but I think AIG is more likely to get Enronized than Lehman, and I suspect that Congress, quite hypocritically, will be baying for a little blood from Fannie and Freddie; lawyers for the defense are going to want to paint the relationship between top management and the Washington establishment (i.e., Congress), as extremely close.  I should say that these predictions are almost guaranteed to be inaccurate, and are based only on reading the same stuff you all are reading.  Nonetheless, here's some of the latest on the criminal side:

• The FBI has announced it is investigating Fannie Mae, Freddie Mac, AIG, and Lehman for fraud.
• Who is the Times singling out?  Gretchen Morgenson has gone after Countrywide a lot, and, now, Joseph Cassano at AIG, which, do remember, had its problems with Elliot Spitzer.  The good news for AIG is that the bailout may make it easy to investigate, but possibly harder to prosecute.
• Two weeks ago, Wachovia CEO Robert Steel told CNBC "we have a great future as an independent company."  Then it got sold for a dollar a share.  (Something like this happened at Bear Stearns as well.)  Troubling, but Wachovia wasn't the first to go, and Steel was, until recently, Paulson's crisis undersecretary.  Will the Feds go after one of their own?   
• The Bear Stearns investigations are well underway.  As the CEO of the first bank to go, the bridge-and-golf-playing James Cayne doesn't have good optics, but he did leave before the collapse.
• Don't forget about the state AGs.  Cuomo has to do something (he may go after the shorts), and the AGs in CT, MA, and FL are all active players as well.

After the jump, the Columbia Journalism Review's juicy multiple choice questions about housing/finance market shenanigans.  Some people ought to pay for those sins!  Go to the article for the answers.

Allegation

1. Handed out copies of the movie Boiler Room as a training tape

2. Partnered to sell its “PayOption Arms” with a brokerage owned by a five-time felon, whose convictions included gun-related charges

3. Forbade loan officers to check borrower income on certain loans

4. Ran an “art department” in its Tampa office, where documents were altered

5. Settled allegations of institutionalized marketing deception that covered two million customers

6. Developed “FastQual,” a program designed to approve borrowers in twelve seconds

7. Incentivized brokers and loan officers through “yield spread premiums” and other compensation schemes to put borrowers into more expensive loans

8. Tapped two kegs of beer at weekly staff meetings

Institution

A. Citigroup

B. Countrywide

C. Ameriquest

D. IndyMac

E. Merit Financial

F. New Century

G. All of the above

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