The U.S. is pressing for guilty pleas from the parent companies of banks under investigation, including Credit Suisse Group AG (CSGN), in a marked departure from the past, according to a person familiar with the negotiations.
Whether prosecutors would be willing to accept a guilty plea from a smaller unit rather than insisting on the bank holding company has been debated in the media since authorities started speaking this year about imminent criminal actions.
Credit Suisse is trying to settle a U.S. tax evasion probe that could include a penalty of more than $1 billion, according to another person familiar with the talks. All the people asked not to be identified because the talks are confidential.
A guilty plea by the bank’s holding company or a unit isn’t a foregone conclusion, said the person who described the government’s focus on the parent company. While prosecutors have won guilty pleas from subsidiaries of large banks, they haven’t gone after holding companies since the financial crisis.
The U.S. is also seeking a guilty plea from the parent company of BNP Paribas SA (BNP), which is under investigation for possible violations of sanctions barring business with prohibited countries, the person said.
Spokesmen for Credit Suisse and BNP Paribas declined to comment on the talks with U.S. authorities. Brian Fallon, a Justice Department spokesman, didn’t return an e-mail seeking comment.
U.K. Treasury to Probe Enforcement by Finance Regulators
The U.K. Treasury is reviewing whether the country’s two finance regulators are doing enough to hold wrongdoers to account.
The government will examine the effectiveness of the Prudential Regulation Authority and the Financial Conduct Authority in its processes for referring cases for enforcement investigations, the Treasury in London said in a statement May 6. It will also look at how they coordinate their work, reach disciplinary decisions, allow suspects to settle early and refer cases to a finance tribunal.
A spokesman for the FCA declined to comment. Sarah Bailey, a spokeswoman for the PRA, a part of the Treasury, said it will “work closely” with the Treasury as the review progresses.
The findings will be reported in the fall.
Greek Regulator to Review Trading of Eurobank Ergasias Shares
The Hellenic Capital Market Commission will investigate share trading in Eurobank Ergasias (EUROB) SA to determine if there were breaches of short-selling rules, according to an e-mailed statement from Greece’s regulator.
The HCMC will impose appropriate sanctions if breaches are found, the regulator said in the statement.
High-Speed Trading Outpacing U.S. CFTC’s Oversight, O’Malia Says
The U.S. Commodity Futures Trading Commission isn’t keeping up with high-speed derivatives trading and needs to invest in tools to detect manipulative and disruptive practices, said Scott O’Malia, a Republican commissioner.
The CFTC lacks the technology necessary to routinely oversee the millions of messages traders send every day to futures exchanges, O’Malia, 46, said May 6 in a speech prepared for a Tabb Forum conference in Chicago.
The CFTC and the Securities and Exchange Commission have increased scrutiny of high-speed trading, while the U.S. Justice Department and New York attorney general are probing whether automated firms get an unfair jump on other traders through computers and data feeds.
The Senate Agriculture Committee, which has oversight of the CFTC, has scheduled a May 13 hearing on high-frequency trading and steps the agency can take to ensure market integrity.