FYI The actual article is audio/podcast. I skimmed through it and it was considered more effective to go after individuals by civil suite.
My personal understanding is a lot that the fraud was widespread among low level mortgage officers (not sure if that's the right word) who were doing things like exagerating a loan applicants income, assets, etc. These individuals may or may not have known the extent of their crimes and most likely were pressured by institional policies. Also proving that the loan/mortgage officer doctored the application and not the mortgage applicant would be difficult to do but it is easy to prove that the bank itself failed to perform due diligence.
When it's a handful of people, you go after the individuals. When it's wide spread, you go after the institution [1]. The challenge is that the DOJ appears to continue to insist on going after white collar crimes like these with civil penalties against the company rather than piercing the corporate veil & starting to criminally prosecute the officers responsible. Talk about moral hazards they're constantly hand wringing over.
You see the same pattern of behavior with the IRS, where they've determined it's easier to go after individuals committing tax offenses rather than massive corporations.
"piercing the corporate veil" generally refers to going after owners/shareholders or their assets, rather than going after employees; that's the level of liability that a corporation protects.
IANAL so I'm not sure what level of legal "protection" employees have vs managers etc. for which levels of crimes (obviously, the janitor is not allowed to shoot people, while the accountant's assistant is not going to bear the brunt of some fraud)
> Piercing the corporate veil refers to the act of holding a company’s owners and executives liable for the company’s debts. This can include either debts owed to commercial creditors, debts owed to judgment creditors, or both. [1]
In a c-corp, everyone is generally absolved of all wrong doing personally. That's the point of the corporate structure. The company & its assets are held liable instead. Peircing the corporate veil is the main way you can go after people & to my knowledge only the board of directors (maybe some shareholders?) & officers are liable. A common short-hand is "C-level executive" but the latter is often a title the company makes up & may not designate an officer. CEO & CFO I believe are statutorily required to be officers but I'm not sure if all statutory C-level positions are required to be officers & I'm not clear if there can be officers who don't have some kind of C-level title. That's why they have to carry personal (expensive) liability insurance to cover their legal costs if that ever happens (in these situations the company can't/won't cover your legal costs) & is one of the justifications they use for having large salaries (to be able to cover these costs).
The link below has instances when an officer may be held personally liable even without piercing the corporate veil but generally can be thought of as the officer did something intentionally illegal that can't be excused as "just doing my job". I don't think gross negligence is generally prosecuted, especially in nuanced technical fields like tech or finance and in larger companies that'll throw lawyers at the problem to maintain the shield (looks bad for you if your CEO is being investigated for fraud).
I'm not a lawyer but I've picked up a bit of (flawed/imperfect) knowledge here & there over the years.
My personal understanding is a lot that the fraud was widespread among low level mortgage officers (not sure if that's the right word) who were doing things like exagerating a loan applicants income, assets, etc. These individuals may or may not have known the extent of their crimes and most likely were pressured by institional policies. Also proving that the loan/mortgage officer doctored the application and not the mortgage applicant would be difficult to do but it is easy to prove that the bank itself failed to perform due diligence.