by Brian Mahany
Anybody who reads this blog knows that we are not fans of the banking industry. While we know some great regional and community banks and bankers, we also know many more – including the big banks – that have done an abysmal job. In our humble opinion, they are responsible for the current economic malaise that has caused hundreds of thousands of people to lose their jobs and / or their homes. People in Washington DC are finally starting to “get it,” however. Recently, we had the opportunity to listen to freshman Senator Elizabeth Warren (Massachusetts) question the heads of the government’s big regulatory agencies.
Her question was quite simple, “When was the last time you took a Wall Street bank to trial?” Unfortunately, none of the regulators could answer.
After a pregnant silence, Thomas Curry, the Comptroller of the Currency bravely stepped up to the plate and attempted to deflect the question. “We do not have to bring people to trial,” he said, adding that his agency had secured many “consent orders” and settlements.
“I appreciate that you say you don’t have to bring them to trial. My question is, when did you bring them to trial?” she again asked.
Backed into a corner, Curry said “We have not had to do it as a practical matter to achieve our supervisory goals.”
Next up was Elisse Walter, chair of the Securities and Exchange Commission, who said she would have to “get back” with an answer. She did say, however, that they too have had many “settlements.”
At least the Comptroller of the Currency and SEC said something. There was remarkable silence from the other agencies including the FDIC, the Treasury Department, the CFTC, the Federal Reserve and the newly created Consumer Financial Protection Board. The reason for the double speak and silence is the simple fact that no one wants to admit that the regulators have never taken a Wall Street bank to trial. Every case settles.
We believe part of the problem is staffing but part is also the incestuous relationship between Wall Street and the agencies that supposedly regulate Wall Street. It is a revolving door with folks jumping back and forth between industry and government.
Warren was not content to simply ask the difficult question that regulators don’t want to answer. In closing, she said “There are district attorneys and United States Attorneys out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial in order to make an example, as they put it. I’m really concerned that ‘too big to fail’ has become ‘too big for trial.”
Amen. A Huffington Post article says that Wall Street angrily denounced her remarks, a sure sign in our book that she has hit a raw nerve. As of this writing, a million + people have watched her appearance before the Senate Banking Committee on YouTube. Considering the nature of the hearing and the fact that no one watches committee hearings, that number is huge.
There are very few law firms willing to take on banks. We regularly get calls from other lawyers who want help in fighting Wall Street and the banks. Currently we have the largest federal false claims act case in the nation against a lender, our whistleblower suit filed against Allied Home Mortgage in which HUD had joined and is seeking $2.4 billion.
If you were hurt or defrauded by a bank, give us a call. Our bank fraud lawyers have litigated a number of cases against banks large and small. (Last week we settled a case for approximately $1 million against a small community bank accused of having a 92 year old woman improperly sign a personal guaranty on a loan already in default.)
Whether you are a business or individual, we sue banks and mortgage companies.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Services available in many jurisdictions.
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