U.S. Senator Elizabeth Warren has questioned three more federal agencies’ enforcement practices by asking if they’ve studied the costs of favoring settlements with big financial firms over taking them to trial.
Warren, a Massachusetts Democrat on the Senate Banking Committee, had earlier questioned Comptroller of the Currency Thomas Curry about why his agency doesn’t take wrongdoing financial firms to trial, such as in the money-laundering case of London-based HSBC Holdings Plc. She sent a similar query in a letter today to Federal Reserve Board Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Jo White and Attorney General Eric Holder.
“If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law,” Warren said in the letter. She argued regulators have “a lot less leverage” if they show a continuing unwillingness to go to trial.
Curry said in a response to Warren last week that the OCC hasn’t conducted research on the benefits of settling without forcing admissions of guilt, according to the letter. Warren is putting the same question to Bernanke, White and Holder about whether they’ve conducted research on the trade-offs between settling and litigating.