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Today's Top News
How Regulators Protect Big Bankers from Jail
CNN report exposes pressure on federal prosecutors to avoid criminal charges
The U.S. government body tasked with regulating JPMorgan Chase & Co. and other big banks appears to be steering federal prosecutors away from criminal charges.
According to Evan Pérez writing for CNN, at a recent meeting in Washington, federal prosecutors asked the Office of the Comptroller of the Currency—the chief body responsible for regulating JPMorgan and other big banks—what would happen if criminal charges were filed against JPMorgan.
The prosecutors were told by regulators that U.S. law requires that they pull the licenses of banks convicted of criminal charges. As a result, the prosecutors reportedly felt pressured not to press criminal charges, for fear of doing damage to the economy.
"Prosecutors complain that when they push for tougher penalties, regulators warn of consequences that could mean damage to the U.S. economy," Pérez writes.
Pérez's claims appear to be confirmed by the statements of U.S. Attorney Preet Bharara, following JPMorgan's settlement Tuesday for its complicity in Bernard Madoff's Ponzi scheme. When asked by reporters why the the bank and its leaders did not face stiffer consequences, Bharara replied,
You have to consider consequences such as employees being laid off, the bank failing... You have to consider consequences such as innocent shareholders losing substantial value. You have to consider the possibility that regulators will take action against the charter of the financial institution.
According to Pérez, "The result is that highly profitable banks pay large settlements and move on."