Following guilty pleas by five of the largest banks to criminal violations, Congresswoman Maxine Waters, Ranking Member of the Financial Services Committee, expressed her disappointment with the Department of Justice’s failure to hold any individuals criminally accountable. In addition, Waters expressed her concern with reports that the Securities and Exchange Commission (SEC) will allow these banks to continue doing business as usual, by waiving certain bad actor disqualifications in the securities laws.
She released the following statement:
“I am pleased that the Department of Justice investigated and prosecuted these five big banks for their illegal actions. However, today’s settlement is just the latest example of a broken system that allows our largest financial institutions to break American law and receive nothing more than a slap on the wrist.
The banks are entering guilty pleas and paying fines, yet no one is going to jail for this criminal behavior. Furthermore, the DOJ itself has noted that the banks in question accounted for 25 percent of the $500 billion-a-day dollars-to-euros spot market, meaning this so-called ‘record fine’ is literally a drop in the bucket.
The matter gets worse with reports that, despite my calls for increased transparency, the Securities and Exchange Commission appears to have rubber-stamped waivers for these institutions, allowing them to continue doing business as if no crime was committed. By granting these waivers of bad actor disqualifications without a rigorous, fair and public process, we have failed to protect our investors, the public, and the markets – and we have done nothing to deter future misconduct by these institutions.
Every day, countless low-level offenders are put in prison for crimes far less serious than what these banks have pled guilty to today. Meanwhile, big banks continue to receive waivers and modest fines – with nobody facing jail time.
Now, only the Department of Labor can appropriately hold these institutions to account, with a transparent and public waiver process.
Banks that are merely fined for their criminal activity and suffer no material impact simply view such penalties as the cost of doing business. I’m very disappointed that even after the unprecedented pain and suffering we have experienced due to the bad behavior of the largest banks, we continue to allow such serious activity to virtually go unpunished.”
Last week, Waters sent a letter to SEC Chair Mary Jo White on this matter, and urged the adoption of a more rigorous, fair, and public process for determining whether to waive these disqualifications. In March, Waters released the “Bad Actor Disqualification Act,” draft legislation that would ensure a more thorough, transparent and public process for granting waivers of bad actor disqualifications at the SEC.