Sen. Warren Slams Regulators for Failure to Prosecute Big Banks
Warren: 'I am really concerned that too-big-to-fail has become too-big-for-trial'
At her debut on the Banking, Housing and Urban Affairs Committee on Thursday, freshman Sen. Elizabeth Warren (D-Mass.) grilled a panel of top financial regulators on their lack of prosecution of banks' criminal activities with repeated emphasis on one particular question: "When was the last time you took a Wall Street bank to trial?"
Educating the panel on the value of taking a bank to trial, Warren explains:
If [banks] can break the law and drag in billions in profits and then turn around and settle paying out of those profits, they don’t have that much incentive to follow the law. It's also the case that when we have a settlement, and not a trial, it means that we don't have those days and days and days of testimony of what those financial institutions have been up to.
The question I really want to ask is about how tough you are — about how much leverage you really have.
The regulators—representing the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Reserve, and the Treasury among others—responded with predictable platitudes: "We have not had to do it as a practical matter to achieve our supervisory goals," said one and, "When we look at these issues [...] we look at the distinction between what we could get if we go to trial and what we could get if we don't," answered another.
Swartz recently committed suicide after being hounded by federal prosecutors over a "harsh array of charges" because they wanted to "make an example" of his activism—a point that Warren may have referenced in her remarks.
"I want to note that there are district attorneys and US attorneys who are out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial to 'make an example,' as they put it," Warren told the group.
"I am really concerned that too-big-to-fail has become too-big-for-trial. That just seems wrong to me."