More anti-bank developments reported here by Dealbook featuring, amongst others, Preet Bharara the US attorney in Manhattan. It was Bharara who took down Galleon and saw that Rajaratnam got jail time.
After that conviction Bharara said:
“The message today is clear — there are rules and there are laws, and they apply to everyone, no matter who you are or how much money you have.”
Now he (and others) are seeking to walk the talk by bringing criminal charges against two foreign banks operating in the US.
Tough ask? Law breaking and deception by banks have only been met to date with non-deterring fines that do nothing to change behaviour.
Citigroup 'misrepresented' subprime exposure ($75m fine); Barclays 'processed transactions' (for over 10 years) for some of the same sanctioned nations BNP is now up for ($298m fine); and there are assorted other US and non-US banking examples that went through the American legal system in similar vein. Limp fines despite reams of emails (for example) incriminating individuals at these banks.
Removing a banking license is the nuclear option and one that it is hard to see ever being applied in the current environment. So clearly a range of punishments between the nominal fine on one hand and complete crucifixion on the other are needed.
Additionally it would be a pleasant surprise if prosecutors were able, from time to time, to find a human being to prosecute (although some did draw fines too at Citigroup) alongside the corporation. That inability has caused judges in some cases to refuse to sign the settlements (initially) insofar as the law granted them the leeway to so act. But they did make a point of berating prosecutors for negotiating timid settlements.
Now there is an apparent change of heart and strategy. Still, it remains hard not to have the thought that some banks simply have better lobbyists than others.