A Tough Week for BNP Paribas

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June 6 (Bloomberg) –- Paul Hastings Partner Richard Farley, Kasowitz Benson Torres & Friedman Partner Michael Bowe and Bloomberg’s Keri Geiger discuss BNP Paribas’ $10B fine and the call for the removal of top executives and employees. They speak to Alix Steel on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Touched -- $10 million fine for paribas.

Do we have the legal authority to make a french company fire top executives?

We have leverage.

We can say that you're fine will be asked, or your transfers will be asked if you do not take this action.

It will be reduced if you do not take these management issues.

Do we think we will see horsetrading from here?

We're seeing they hammering out of a new paradigm for banking enforcement and the theater was a criminal indictment till the bank.

Prosecutors were afraid to charge them.

Jpmorgan used that of effectively to get a non- prosecution argument.

We just talked about credit suisse settlement.

Think prosecutors are looking at that and wincing because they do not want to kill the companies but they also do not want the stock to go up.

What they are doing is they are going to bnp paribas and saying that a criminal plea is not the best penalty, so you can take it any good survive as well as you are -- long as you're willing to make peace with the regulators.

Those regulators are tracking high prices.

What happens here?

How long until we get some sort of resolution?

As we have reported, the president of france and president obama had a session over dinner this week.

They are going to have to go through the criminal plea process.

This fine will hurt.

People the market are worried that a bank the size will be paying up to $10 billion for this -- it will wipe out earnings.

It could.

Also, it is going to start to impact the capital ratio.

This is sending a message to the market.

We are going to force employees to step down, there are more than 1000 people on the chopping block, and we're going to give you a fine that hurts.

A criminal plea does not mean a death sentence, so it will hurt financially, and it will interfere with management structure.

But the prosecutors have a thin line to walk.

Or we will see salutation from the french defense government.

-- some retaliation from the french defense government.

That is true.

We have no idea if that is something that is on the table.

That is not beyond the realm of awesome ability but -- of possibility, but i think we will go to trial.

I was reading in the financial times, there was an op-ed that says america is using its banking laws not to make its financial system state for -- safer, but rather to advance foreign-policy and national security object is.

-- objectives.

I think you federal prosecutors with legitimate investigation into egregious conduct, and the dynamic here is you also have to deal with banking regulators who can withdraw charter and the sec would then withdraw regulation.

What is happening here is that prosecutors are saying you need to take a plea, and take the criminal sanction.

Go take a talk with the regulators about how you stay alive.

This will be the price you have to pay.

When you get into the state taking regulators, they are political appointees.

One could ask is the new york banking regulator coming down happier because he does not have the same interest -- head of the year because he does not have the same interest?

There is a case that can be made, particularly a high profile case, they will try to make it.

If they thought jpmorgan had done the same conduct, if you think thery would not be -- there is a different set of regulators that were overseeing what was happening with jpmorgan.

Any regulator would salivate at the upper nudity twos --

This text has been automatically generated. It may not be 100% accurate.


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