2015 Spurred Billions in Bank Fines, But Not Enough for WarrenBy
Senator's staff issues report highlighting `rigged justice'
Prosecutors and SEC called out for not punishing individuals
Wall Street’s most famous critic has offered her assessment of how good a job authorities did last year punishing corporate wrongdoers. The verdict, not surprisingly, is that Elizabeth Warren is not impressed.
In a 10-page report titled “Rigged Justice: 2016,” the U.S. Senator’s staff cited 20 cases in which they say prosecutors showed “timidity” by not pursuing individuals for civil or criminal misdeeds. No executives at Citigroup Inc., JPMorgan Chase & Co., or Deutsche Bank AG were accused of wrongdoing in cases alleging rigged currency markets and the misleading of investors, her office wrote in the document released Friday. The investigations led to their companies paying billions of dollars in penalties.
To the potential annoyance of banks and their watchdogs, Warren’s staff said the report is the first of what will be an annual exercise. That shows Warren has no plans to stop bashing Wall Street or its regulators, even if her platform for throwing barbs isn’t as prominent as it might have been had she run for president. Supporters famously spent months trying to persuade the Massachusetts Democrat to throw her hat in the ring.
The document also lambastes prosecutors for settlements they reached with General Motors Co. and Standard & Poor’s. In each case, Warren’s staff wrote, the government extracted hefty fines but didn’t take a single individual to task. The criticisms indicate her office doesn’t believe any prosecutions of executives are forthcoming.
The report even dismisses a recent U.S. Justice Department announcement, known as the Yates memo, in which Deputy Attorney General Sally Quillian Yates heralded a new direction by telling prosecutors to embark on investigations by focusing on people, not companies. “Both before and after this DOJ announcement, accountability for corporate crimes has been shockingly weak,” Warren’s office wrote.
Patrick Rodenbush, a spokesman for the Justice Department, declined to comment.
Warren’s staff castigates the Securities and Exchange Commission as “particularly feeble” for waiving penalties that are triggered when companies settle serious civil or criminal charges. The punishments can disqualify a bank from lucrative business activities, such as raising money for hedge funds. In most cases, the SEC waives them because it concludes the broad sanctions would harm innocent parts of a business that didn’t employ any of the bad actors.
Gina Talamona, an SEC spokeswoman, declined to comment.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.