Prosecuters Seem Surprised that Banksters May Still Be Breaking the Law


Respectfully submitted by Lawrence E. Rafferty (rafflaw)-Weekend Contributor

We have written on multiple occasions about the illegal activities of Big Banks and Wall Street financial firms as well as their penchant to repeat their offenses.  It now seems that a State regulator and two Federal prosecutors may have finally come to the conclusion that many Big Banks are not only continuing their illegal practices, but that they may have hid information during prior investigations into their allegedly shady dealings.

While I am glad that at least two Federal prosecutors may be putting the heat on some of the repeat offenders by extending their deferred prosecution agreements and opening new investigations and taking a second look at past investigations, my first response is what took them so long?

According to the New York Times, New York State Regulator Benjamin Lawsky and Federal Prosecutors Leslie R. Caldwell and Cyrus R. Vance, Jr. believe that some of the Big Banks have not been telling the truth.

“It would be the Wall Street equivalent of a parole violation: Just two years after avoiding prosecution for a variety of crimes, some of the world’s biggest banks are suspected of having broken their promises to behave.

A mixture of new issues and lingering problems could violate earlier settlements that imposed new practices and fines on the banks but stopped short of criminal charges, according to lawyers briefed on the cases. Prosecutors are exploring whether to strengthen the earlier deals, the lawyers said, or scrap them altogether and force the banks to plead guilty to a crime.

That effort, unfolding separately from a number of well-known investigations into Wall Street, has ensnared several giant banks and consulting firms that until now were thought to be in the clear.

Prosecutors in Washington and Manhattan have reopened an investigation into Standard Chartered, the big British bank that reached a settlement in 2012 over accusations that it transferred billions of dollars for Iran and other nations blacklisted by the United States, according to the lawyers briefed on the cases. The prosecutors are questioning whether Standard Chartered, which has a large operation in New York, failed to disclose the extent of its wrongdoing to the government, imperiling the bank’s earlier settlement.” New York Times

As the New York Times states, Standard Chartered was caught illegally transferring Billions of dollars to blacklisted nations.  Of course, their penalty the last time was a large fine, but allegedly not large enough to prevent them from possibly not being totally forthright in the earlier investigation.

Unfortunately, Standard Charter is not the only Big Bank and Wall Street firm that may soon join the Repeat Offenders Club.

The Bank of Toyko and PriceWaterhouseCoopers are both being looked at by the State of New York and the Manhattan Federal prosecutor to see if their past settlements need to be amended in light of new information that appears to prove that both entities fudged the reports given to the regulators during the first investigation.

“New York State’s banking regulator is also taking a fresh look at old cases, reopening a 2013 settlement with the Bank of Tokyo-Mitsubishi UFJ over accusations that the bank’s New York branch did business with Iran, according to the lawyers who were not authorized to speak publicly.

The regulator, Benjamin M. Lawsky, the lawyers said, is negotiating a new settlement deal with the bank that, if it goes through, would involve a penalty larger than the $250 million it paid last year. Mr. Lawsky suspects that the bank initially played down the scope of its wrongdoing.

PricewaterhouseCoopers, the influential consulting firm that advised the Japanese bank on that case, is also under investigation, according to the lawyers briefed on the matter. The Manhattan district attorney’s office is examining whether the firm watered down a report about the bank’s dealings with Iran before it was sent to government investigators.

Those developments, not previously reported, are part of a broader revisiting of settlements with some of the world’s biggest banks, an effort that has focused on foreign banks but could eventually spread to American institutions.”  New York Times

While I commend these regulators for their efforts, how many times do these foreign banks and domestic banks like Bank of America and JP Morgan get to break the law and only have to pay a fine or penalty that in many cases is a tax-deductible “cost of doing business”?   Instead of merely revisiting the prior deferred prosecution agreements, it might make more sense to put a few top officers of these institutions in jail with serious sentences instead of just making the fines and penalties larger.

The New York Times article that we have linked to above, seems to suggest that the government may finally be considering more serious penalties. But will anyone go to jail?

“Even now that prosecutors are examining repeat offenses on Wall Street, they are likely to seek punishments more symbolic than sweeping. Top executives are not expected to land in prison, nor are any problem banks in jeopardy of shutting down.

Still, fearing a certain fallout from the new round of scrutiny, banks have bolstered their legal teams. Standard Chartered, for instance, has retained one of the most lauded litigators in the country, Theodore V. Wells Jr., to work on the reopened sanctions case, according to the lawyers briefed on the matter.

The decision to revisit the cases also draws attention to consulting firms that helped shape the original settlements. When determining the extent of wrongdoing at a bank, the government often relies on assessments from consultants that are handpicked and paid by the same bank.” New York Times

That last sentence quoted above is just one example of how these Big Banks have been successful in keeping their profitable illegal activities safe from prying investigators eyes.  The banks hire and pay for the consultants that the government uses in their investigation of those very same banks.  Does anyone else see a problem here?  In effect, it is akin to buying a jury or at least, hiring your opponents expert witness.

I highly recommend that you read the entire New York Times article that we have linked to above.  The only way the various State and Federal regulators can bring the Big Banks and Wall Street firms under control is to use the full weight of the law against the Banks when they break the law.  If an individual intentionally funnels millions of dollars to blacklisted nations, would that individual just get fined?

While the reopening of these past cases and the renewed scrutiny by State and Federal regulators in future cases is a good thing, the only way to get the attention of these lawbreakers is to indict corporate officers and board members who knew or authorized the illegal behavior.  If they are convicted, put them in jail.  If not, their corporate money will continue to bankroll illegal schemes to get around their past settlements and flaunt the law.

Oh, by the way, not allowing the Banksters to deduct their penalties and fines might help!

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38 thoughts on “Prosecuters Seem Surprised that Banksters May Still Be Breaking the Law”

  1. Obama may be the first POTUS to abandon ship and let Biden have at it for the next 2 years. GOP Senate and Congress are going to give the non-Caucasian with the queer name – as much hell as they can possibly give.

    Our President’s have less power than most people will acknowledge.

    JFK can tell you that from experience;
    a Precedent setting Presidency….

    N’est-ce pas!

  2. I get it that Obama is responsible for everything bad that has ever happened – even things that happened before he was snuck into the US as part of a liberal conspiracy to take over the presidency and create a fascist dictatorship. My only criticism of him, since I’m all in favor of fascist dictatorship (being a republican voter even since before I was born), is why is he taking so long? Shoot, we’ve had six years of the Obama presidency and all I’ve seen is continuation of Bush regime left-wing communist atheist islamic policies. Jeez Obama needs to wake, up he has only two years left!!

    My dog died two months ago and my cat died of cancer four weeks ago. I’m still trying to figure out how the Obama apparatchiks got into my house, presumably numerous times, and killed my poor innocent animals. Were they just testing some new CIA sponsored lethal bacteria using a sneak & peek warrant?

  3. Everyone is looking at a tree and missing the forest.

    There’s going to be a hearing on November 21 – concerning the Goldman Sachs tapes recorded by lawyer/examiner Carmen Segarra. It concerns the breaches of fiduciary duty as a result of a federal regulatory mindset to give the likes of Goldman Sachs – A Pass….

    Now, it is beyond a shadow of any doubt that our federal institutions treat Wall Street different than main street. Steal a purse and you go to jail. Steal a pension fund or loot accounts; and pay a fine.

    And – yet – we all banter and babble as if such “should” be a problem.

    If you ask “why” the prosecutors took so long to get more serious (if that is what they are “really” doing) – without looking at the mirror when you do so;

    they you are “still” failing to address the true issues at hand.

    It is as if the public, just like the prosecutors (possibly as an SEC regulator looking for a future job) – would rather dabble in generic banter;

    instead of the “real” thing.

    Unless we all show a real interest in halting sophisticated law breaking run around by Wall Street white collar frauds –

    they’ll just adapt to new schemes and find more devouring ways.

    Proof of this premise is the fact that I’m living the saga first hand. Not one of you have ever written about it, spoke to me about and/or even asked a question. Yet the evidence is vast, overwhelming and even undeniable (we have confessions). The cases are simple to see and involve not only willful blindness; but also down right duplicity.

    Nor is it like the perpetrators aren’t of significance.

  4. It took just long enough to run out the statutes of limitations. This is a corrupt president and corrupt DOJ. Matt Taibbi should be having an article coming out on Holder in RS fairly soon.

    His article may answer some of the questions about why bank fraud has not been touched by this administration.

  5. Karl, a lot of non-working people should be upset, too, but it’s just business-as-usual for the large Corporations/Media/Banks/Governments that control the system. Ordinary sheeple like being “citizens” of their countries, but they don’t like being involved in the administration and policy-setting duties, so they hire professional liars and crooks to handle that for them and then wonder why they get taken advantage of and robbed blind. Doesn’t matter if it’s Capitalism, Socialism, Fascism, Theocracy, Plutocracy, Monarchy, Oligarchy, or whatever. Governments are naturally corrupt. They are tools used by individuals and small groups to control larger groups of humans for the benefit of the ruling class. They don’t protect freedoms as they say they do, but only limit and eliminate them for their subjects. Just the way the world operates. Conquest and domination by the strongest and craftiest.

  6. It’s like what part of American Capitalism is inherently a predatory society don’t people get?

    It’s like trying to change a Leopard’s spots.

    Foreign policy can only be an extension of domestic policy.

    You send paid police to kick in the doors or Iraqi civilians & shoot their dogs then you’re shocked when they do the same thing at home?

    Only when you accept the fact that we live in a unified predatory State (the State being defined universally as “armed gangs defending property”) governed by a 2 party Kleptocracy that never bickers when it comes to screwing over working people.

    Think about it. All recent Wars or NAFTA-style Trade Agreements have been very unpopular with the public yet they’ve all been rammed down the public’s throat with “bi-partisan support”. There’s no counter example.

    No wonder since these wars & trade agreements naturally impoverish working people in ALL countries, which are all historically passed (despite enormous public resistance) with bi-partisan cheering.

    Just remember folks that the words “bi-partisan agreement” means working people better hold onto their wallets,

    And you have some of the most popular fools in politics urging more “bi-partisan support” for curing the country’s ills!

    The country’s ills are structured in it’s DNA — so good luck curing that with meager reforms within a Predatory State with a monopoly propaganda media & 2 parties bickering over the smalls while the 1% always agree on the big stuff like wars & trade agreements.

    The fact is that throughout all history so-called “Western Democracies” have never prevented a single war. Think about that.

  7. One thing that pisses me off about the Republicans. They couldn’t wait to give $100s of billions in TARP money to the Banksters, but Bailout GM with 3 billion? OMG, that’s Socialism! Romney was one of those. Idiot. It probably cost him Ohio in 2012.

  8. The 2008 financial disaster, along with TARP, was a bi-partisan disaster. All this crap started with the 1998 bill which allowed interstate banking and lead to firms that were “too big to fail”. And both parties conspire to keep the Federal Regulators understaffed and overworked. People like the head of Washington Mutual and Countrywide should be in Jail – instead they’re probably on the Riviera enjoying their millions.

  9. So it seems that the argument is not so much against the three stooges and republicans who caused the mess but against Obama for not cleaning it up fast enough and well enough. Well idiots, you may get your republican disaster in again.

  10. Olly,
    In my long person story of yesterday, Obama/Holder would have been that father figure you defend and the son, the banking system. I painted a story that you should have recognized, yet felt compelled to still attack me. Odd…

  11. Banks have “Charters”. They can be revoked. A drunk driver loses his drivers license. A bank that commits crimes should lose the Charter. Then dissolve the bank and pay the creditors, shareholders, and other fines.

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