Wednesday, April 30, 2014

US Government May Seek Criminal Charges Against Two Large Banks

Banks have been protected from criminal charges by a problem that has made many banks "too big to jail".  The Justice Department has searched for ways to punish banks without putting them out of business.  A criminal charge might put a bank out of business if bank regulators were forced to revoke their charters if the bank were found guilty of a criminal offense.  Sentiment in the Justice Department has been changing about bringing criminal charges against large banks.

BNP Paribus is France's largest banks.  It is accused of doing business in Sudan and in Iran after they were blacklisted by the US government.  Credit Suisse is Switzerland's largest bank. It is being targeted for assisting US citizens to evade taxation by the use of tax shelters.  Prosecutors have been having discussions with their US regulators to find ways to bring criminal charges against them without revoking their charters.  HSBC had avoided criminal charges for enabling money laundering, and JP Morgan avoided criminal charges for aiding and abetting the Madoff Ponzi scheme.  They were handed billion dollar fines instead of being charged with criminal offenses.  That practice may be coming to an end.

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