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SENATORS CALL OUT ATTORNEY GENERAL ON =ARE BANKS TOO BIG TO JAIL?

SENATORS CALL OUT ATTORNEY GENERAL ON =ARE BANKS TOO BIG TO JAIL?

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Published by 83jjmack
CONTENTS INCLUDE THE TEXT OF THE LETTER FROM THE SENATORS TO ERIC HOLDER THE US ATTORNEY GENERAL
CONTENTS INCLUDE THE TEXT OF THE LETTER FROM THE SENATORS TO ERIC HOLDER THE US ATTORNEY GENERAL

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Published by: 83jjmack on Mar 07, 2013
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Sens. Brown, Grassley Press JusticeDepartment On "Too Big To Jail" 
Senators Question Whether “Too Big to Fail” Status of Some Wall Street Megabanks Undermines Government’sAbility to Prosecute Large Financial Institutions, ImposeAppropriate Penalties
Tuesday, January 29, 2013WASHINGTON, D.C. – U.S. Sens. Sherrod Brown (D-OH) and Chuck Grassley (R-IA) sent aletter today to U.S. Attorney General Eric Holder questioning whether the “too big to fail” statusof certain Wall Street megabanks undermines the ability of the federal government to prosecutewrongdoing and impose appropriate penalties. They also requested that the Justice Departmentdisclose the identities of parties with whom prosecutors consult about the appropriate level of penalties for financial institutions.
 
“Wall Street megabanks aren’t just too big to fail, they’re increasingly too big to jail,” Brownsaid. “Already, the nation’s six largest megabanks enjoy what amounts to taxpayer-fundedguarantee by virtue of their size, making it harder for regional and community banks to compete.Now, these megabanks may also enjoy some impunity when they violate the law by launderingmoney or illegally foreclosing on homeowners. Wall Street should pay the full price of itswrongdoing, not pass the costs along to taxpayers.”“The best deterrent to crime is to put people in prison,” Grassley said. “That includes those atpowerful banks and corporations. Unfortunately, we’ve seen little willingness to charge theseindividuals criminally. The public deserves an explanation of how the Justice Departmentarrives at these decisions.”Brown, who chairs the Senate Banking Subcommittee on Financial Institutions and ConsumerProtection, is the author
the Safe, Accountable, Fair & Efficient (SAFE) Banking Act 
, legislationthat would prevent any one financial institution from becoming so large and overleveraged thatits collapse could put our economy on the brink of collapse or trigger the need for a federalbailout. He also passed legislation with Sen. David Vitter (R-LA) to requiring the GovernmentAccountability Office to study how banks with assets of $500 billion or more benefit from thebelief that the government would not let them fail in a crisis.As Ranking Member of the Judiciary Committee, Grassley has been critical of the JusticeDepartment’s decisions against holding people criminally accountable in financial cases. Hecalled the Justice Department’s decision to forego any criminal prosecution of HSBC officialsinvolved in that money laundering scandal inexcusable. And he has questioned the JusticeDepartment about the number of mortgage fraud cases brought forward, revealing a failure to
 
bring significant criminal cases against any of the major banks or financial institutions that havefaced civil actions for various frauds. Grassley is the author of the Fraud Enforcement RecoveryAct, signed into law in 2009, that was designed to ramp up the government’s response to thecrisis and ensure that prosecutors and investigators had the tools needed to combat fraud.The full text of the letter from Brown and Grassley to Holder can be found below.
 January 29, 2013
 
The Honorable Eric H. Holder, Jr.United States Attorney General
 
U.S. Department of Justice
 
950 Pennsylvania Avenue, N.W.
 
Washington, D.C. 20530
 
 Dear Attorney General Holder:
 
The large number of private and government lawsuits since the global financial crisis continuesto undermine public confidence in our financial markets. This confidence can only be restored by demonstrating that there are consistent rules in place that provide accountability for wrongdoing and deter financial predators.
 
Unfortunately, many of the settlements between large financial institutions and the federalgovernment involve penalties that are disproportionately low, both in relation to the profitswhich resulted from those wrongful actions as well as in relation to the costs imposed uponconsumers, investors, and the market.The nature of these settlements has fostered concerns that “too big to fail” Wall Street banksenjoy a favored status, in statute and in enforcement policy. This perception undermines the public’s confidence in our institutions and in the principal that the law is applied equally in allcases.
 
On settling with Swiss Bank UBS for Libor manipulation, for example, you said, “[t]he impact on the stability of the financial markets around the world is something we take intoconsideration. We reach out to experts outside of the Justice Department to talk about what arethe consequences of actions that we might take, what would be the impact of those actions if wewant to make particular prosecutive decisions or determinations with regard to a particular institution.”
 
 In an interview with Frontline, outgoing Assistant Attorney General Lanny Breuer defended the Department of Justice’s inability to prosecute large financial institutions by saying, “but in anygiven case, I think I and prosecutors around the country, being responsible, should speak toregulators, should speak to experts, because if I bring a case against institution, and as a result of bringing that case, there’s some huge economic effect — if it creates a ripple effect so that suddenly, counterparties and other financial institutions or other companies that had nothing todo with this are affected badly — it’s a factor we need to know and understand.”
 
These statements raise important questions about the Justice Department’s prosecutorial philosophy. In order to explore the Justice Department’s treatment of potential criminal activityby large financial institutions, please answer the following questions and provide the followinginformation:
 
1. Has the Justice Department designated certain institutions whose failure could  jeopardize the stability of the financial markets and are thus, “too big to jail”? If so, pleasename them.
 
2. Has the Justice Department ever failed to bring a prosecution against an institutiondue to concern that their failure could jeopardize financial markets?
 
3. Are there any entities the Justice Department has entered into settlements with, inwhich the amount of the settlement reflected a concern that markets could be impacted by such asettlement? If so, for which entities?
 
4. Please provide the names of all outside experts consulted by the Justice Department inmaking prosecutorial decisions regarding financial institutions with over $1 billion in assets.
 
5. Please provide any compensation contracts for these individuals.
 
6. How did DOJ ensure that these experts provided unconflicted and unbiased advice to DOJ?
 

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