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Government Penalizes Five Banks for Wrongdoing; Time Now for Criminal Prosecutions

Statement of Robert Weissman, President of Public Citizen

Today, the Commodity Futures Trading Commission (CFTC) is penalizing five of the world’s largest banks for concerted efforts to manipulate global foreign exchange markets – yet another reminder of the rampant criminality and wrongdoing on Wall Street.

Strikingly, as the CFTC notes in understated fashion in its release, “[S]ome of this [improper attempted manipulation of foreign exchange markets] conduct occurred during the same period that the Banks were on notice that the CFTC and other regulators were investigating attempts by certain banks to manipulate the London Interbank Offered Rate (LIBOR) and other interest rate benchmarks.”

In other words, the banks were on notice that they were under investigation for similar wrongdoing in another global financial market – and still continued with the attempted manipulation of the foreign exchange market!

For too long, U.S. law enforcement agencies have been far too soft on Wall Street lawbreakers. In recent years, the U.S. Department of Justice has entered into deferred prosecution or non-prosecution agreements with RBS, JPMorgan Chase, UBS and HSBC, choosing not to prosecute these firms for large-scale wrongdoing. The department has also agreed to high-profile civil settlements with JPMorgan and Citigroup.

Completely absent has been serious criminal enforcement against the Wall Street firms and Wall Street executives.

It’s past time to say: Enough is enough. It’s past time for the Justice Department to enforce the law and hold the powerful to account.

Numerous published reports indicate that the Department of Justice is considering criminal prosecutions of individuals responsible for the attempted foreign exchange manipulation schemes. It is vital that the department pursue these prosecutions, holding both top-level executives – not just lower-level functionaries – and the firms themselves criminally liable.

And, if bank regulators tell the department that criminal prosecution of large financial institutions would endanger the global financial system, then those same regulators should act immediately to break up firms whose size affords them immunity from criminal sanction.

Wall Street managed to escape criminal sanctions for wrongdoing that crashed the global economy, and threw millions of out of their homes and tens of millions out of work. If there is no criminal enforcement against Wall Street firms and executives for wrongdoing, there is no justice for Main Street, and we’re virtually certain to see epic-scale misdeeds and epic-scale devastation yet again.