Every know and then we check back on our “friends,” America’s too big to fail banking behemoths. Bank of America, Citi, Wells Fargo and JP Morgan Chase. Usually when we write a new post its because Sen. Elizabeth Warren has been on the warpath and was able to extract more silence and stuttering from the alphabet soup of regulatory agencies. Even billion dollar whistleblower lawsuits now seem blasé.
So what caused us to revisit our old friends? LinkedIn! It’s true – a recent post on LinkedIn’s Financial Crime Risk industry group has lots of people talking. Here are the highlights:
The nation’s six largest banks have paid $62,200,000,000.00 over the last 3 years to settle lawsuits, many of which were brought by a former employee turned whistleblower. The leader of the pack is our perennial favorite, Bank of America.
Over the next couple years it will take another $24 billion to settle remaining claims, most of which relate to junk mortgages and toxic assets.
If you add both figures together, you get $89 billion. Yet no bank has been forced to admit any wrongdoing.
Worse yet, all of these settlements ultimately come from shareholders. (Many pension funds own shares in the big banks.) None of the money has come from bank executives.
One commenter had this to say,”I only wish that Justice Department action matched Attorney General Holder’s words when he said, introducing his task force, ‘The mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening.’ ”
Another had these harsh words, “The only reason I see for the cowardice to prosecute is that the right people are bought off, either through the prospect of future employment and business or through political contributions. The Golden Rule is alive and well.”
One of the poignant posts said, ” ‘Captured’ regulators seemed to be a better explanation … explaining how things went from over 700 doing jail time in S&L crisis and so far nobody doing jail time in the current financial mess (even though it was several times larger). Also explains why SEC failed to do anything about Madoff for over decade despite numerous tips & reports.”
It’s clear the Justice Department doesn’t have the muscle to put bad boy bankers in prison. While Justice employs some very talented prosecutors, the decision to prosecute a C suite level banker from a major financial institution isn’t made by some rank and file assistant United States attorney or Justice Department trial lawyer. It must come from Washington DC.
The one bright spot has been federal false claims act (whistleblower) cases. More and more insiders are simply becoming disgusted with the behavior of the “too big to jail” crowd. Perhaps they are too big to jail but a whistleblower can certainly hurt them in the wallet and local U.S. Attorneys Offices have been courting those cases.
If you think you have what it takes to stand up to the Wall Street bullies, we want to hear from you. To become a whistleblower you must have none public, original source information about a fraud involving a loss to the government. Losses incurred by mortgage guaranty programs and the FDIC qualify.
Why should you become a whistleblower? Because its possible to receive an award of up to 30% of whatever the government collects.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Minneapolis, Minnesota; Portland, Maine and San Francisco, California. Services available in many jurisdictions.
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Posted by Brian Mahany, Esq.