Wall Street Impunity

On the Ten-Year Anniversary of the 2008 Financial Crisis, the Trump Administration Is Prepared to Go Soft on Big Banks

The failure of regulators to police corporate wrongdoing on Wall Street was a key factor that ten years ago helped trigger the 2008 financial crisis.

Despite President Donald Trump’s “law and order” rhetoric, Public Citizen research shows his administration had demonstrated a steep decline in enforcement against corporations – including agencies responsible for regulating Wall Street.

At the Securities and Exchange Commission, which protects shareholders from corporate fraud and abuse, the total penalties against corporate violators dropped by 68 percent, from more than $2.9 billion to about $927 million.

At the Office of the Comptroller of the Currency, another powerful bank regulator, penalties dropped by 58 percent.

At the Commodity Futures Trading Commission, the agency that, among other things, polices the derivatives market, penalties dropped 80 percent.

Table 1: Sums of penalties imposed against corporations by financial regulators, Jan. 20, 2016, through Jan. 19, 2018.

Agency Penalty Sum from Obama’s Last Year Penalty Sum from Trump’s First Year % Change in Penalty Sums
Commodity Futures Trading Commission $751,793,192 $153,469,100 -80%
Securities and Exchange Commission $2,909,912,692 $927,377,931 -68%
Office of the Comptroller of the Currency $214,981,500 $89,316,420 -58%
SOURCE: Public Citizen analysis of Violation Tracker database.

 

Table 2: Number of enforcement actions against corporations by financial regulators, Jan. 20, 2016, through Jan. 19, 2018.

Agency Enforcement Actions in Obama’s Last Year Enforcement Actions in Trump’s First Year % Change in Enforcement Actions
Securities and Exchange Commission 207 116 -44%
Commodity Futures Trading Commission 51 36 -29%
Office of the Comptroller of the Currency 14 10 -29%
SOURCE: Public Citizen analysis of Violation Tracker database.

President Trump has pledged to “Make America safe again” and railed against “American carnage.” But if the agencies responsible for holding Wall Street accountable for the kind of recklessness and wrongdoing that led to the 2008 crisis, how safe is America from the next economic catastrophe?