Sen. Elizabeth Warren: How many Wall Street bankers have been prosecuted?

Thank You mr. chairman in the past year the three largest banks in this country JPMorgan Chase Citigroup and Bank of America have admitted to breaking the law and have settled with the government for a combined 35 billion dollars now as Judge Rakoff of the Southern District of New York has noted the law on this is clear no corporation can break the law unless an individual within that corporation broke the law yet despite the misconduct at these banks that generated tens of billions of dollars in settlement payments by the companies not a single senior executive at these banks has been criminally prosecuted now I know that your agencies can't bring prosecutions directly but you are supposed to refer cases to the Justice Department when you think individuals should be prosecuted so can you tell me how many senior executives at these three banks you have referred to the Justice Department for prosecution well senator I don't know the answer to that question but here's I want to pick up on something you just said because I think it's actually quite important that although failures of the sort that that have resulted in these big fines criminal and civil almost always result from problems and organizations because there are many ways to catch the other truly I'm so than if I could there often our individuals who can clearly be identified as responsible and although as you know we don't have criminal prosecutorial power what we do have is the power to insist that firms either discharge current employees who have been implicated in this even if they haven't been criminally prosecuted which we've done in the past couple of cases or as we are doing now conducting investigations under the authorities that are already in the law that would allow us to ban these people from working for so I take it what you're saying governor Tarullo is that you don't know of any criminal prosecutions in these three things that the Fed has recommended well will you have just dated enough to know that all these banks are responsible they have given they've admitted to wrongdoing they have signed up for thirty five billion dollars in a settlement and no one has been referred well senator we've shared all the information that the Department of Justice needed and I think the Justice Department has probably made its own assessment done on both sets of criminal and civil suit so you're saying you have referred people for criminal prosecution no we have we have provided information but you have not actually referred someone for criminal prosecution you know I just wait I want to be clear about the contrast here after the savings and loan crisis in the 1970s in the 1980s the government brought over a thousand criminal prosecutions and got over eight hundred convictions the FBI opened nearly five thousand five hundred criminal investigations because of referrals from banking investigators and regulators so if we didn't even limit it to these three banks how many prosecutions have you all regulated what we have to remember here is the main reason that we punish illegal behavior is for deterrence you know to make sure that the next banker who's thinking about breaking the law remembers that a guy down the hall was hauled out of here in handcuffs when he did that these civil settlements don't provide deterrence the shareholders for the companies pay the settlement senior management doesn't pay a dime and in fact if you're like Jamie Dimon the CEO of JPMorgan Chase you might even get an eight point five million dollar raise for the settlement of negotiating such a great settlement up when your company breaks the law so without criminal prosecutions the message to every Wall Street banker is loud and clear if you break the law you are not going to jail but you might end up with a much bigger paycheck so no one should be above the law if you steal a hundred bucks on Main Street you're probably going to jail if you steal a billion bucks on Wall Street you darn well better go to jail too or follow up on senator Warren's observations regarding the Justice Department in criminal activity and financial institutions or whatever oh I realize that you're regulators you're not prosecutors but if there's thirty five billion dollars more or less in fines and settlements because of criminal conduct and there's no justice justice is important for the big and the well being and also small something's wrong with the Justice Department and people shouldn't be able whoever they are not just financial institutions should be able to buy their way out of for culpability especially when it's so strong it defies rationality you know I agree with her on that

Channel: Senator Elizabeth Warren

Views: 125,410

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Length: 5min 45sec (345 seconds)

Published: Tue Sep 09 2014