Washington,
DC, June 28, 2016-- Since the beginning of 2010, two dozen major U.S. and foreign-based
banks have paid more than $160 billion in U.S. penalties to resolve a wide
range of cases brought against them by the Justice Department and federal
regulatory agencies. Bank of America alone accounts for $56 billion of the
total and JPMorgan Chase another $28 billion. Fourteen banks have each
accumulated penalty amounts (both fines and settlements) in excess of $1
billion, and five of those are in excess of $10 billion.
Along
with misconduct that helped bring about the financial meltdown of 2008, the
cases have involved alleged offenses in ten other major categories ranging from
manipulation of foreign exchange markets to violations of rules prohibiting
business dealings with enemy countries.
These are
some of the key findings of The $160 Billion Bank Fee, a report that
analyzes the data contained in Violation Tracker 2.0, an expanded version of a database on
corporate misconduct. Both the database and the report are produced by the
Corporate Research Project of Good Jobs First and are available to the public
at no charge here.
Violation
Tracker, introduced last fall with environmental and safety cases, now also
contains entries on 700 cases involving banks and other financial companies
brought by the Justice Department and ten federal regulatory agencies. Also
newly added are 600 cases filed against non-financial firms for offenses such
as price-fixing, foreign bribery, and export-control violations. The database
now covers cases from 27 federal agencies and the DOJ.
"Violation
Tracker 2.0 is another step in our effort to create a comprehensive database on
corporate misconduct," said Good Jobs First Research Director Philip
Mattera, who heads the Corporate Research Project and leads the work on
Violation Tracker. "We want this to be a valuable resource for groups
promoting corporate accountability."
Using a
proprietary system of parent-subsidiary matching developed by Good Jobs First
for its Subsidy Tracker database, Violation Tracker links the
companies named in the violations to their ultimate corporate parents. Users
can see not only individual records but also aggregate penalty totals for more
than 1,900 parents. "We are pleased to employ our matching system to
enhance another dataset of vital public interest," said Good Jobs First
Executive Director Greg LeRoy.
The $160 Billion Bank Fee report focuses on a subset
of the new data: 144 mega-cases with penalties of $100 million or more (not
including private litigation) involving major banks. They account for more than
80 percent of the total-dollar penalties of the 1,300 cases in the Violation
Tracker expansion. Among the report's other findings:
- Along with Bank of America and JPMorgan Chase, the other banks with the most penalties are: Citigroup ($15.4 billion), Wells Fargo ($10.9 billion), the French bank BNP Paribas ($10.5 billion) and Goldman Sachs ($9.1 billion).
- The largest categories of cases are: sale of toxic securities and mortgage abuses ($118 billion in penalties), violation of rules prohibiting business with enemy countries ($15 billion), manipulation of foreign exchange markets ($7 billion), manipulation of interest rate benchmarks ($5 billion), and assisting tax evasion ($2 billion).
- Of the 144 mega-cases, 120 were brought solely as civil matters. The other 24 involved criminal charges, though in two-thirds of those cases the banks avoided prosecution. The latter include 10 settlements with deferred prosecution agreements and six with non-prosecution agreements. The banks that have pleaded guilty to criminal charges include: Citigroup, JPMorgan Chase, Barclays, BNP Paribas, Credit Suisse and Royal Bank of Scotland.
Good Jobs First is a Washington, DC-based resource center
on economic development accountability. Its Corporate Research Project provides
research resources for non-profit organizations. The initial version of
Violation Tracker was supported by a grant from the Bauman Foundation.
AGENCIES COVERED IN VIOLATION TRACKER EXPANSION
Cases involving banks and financial companies:
Justice
Department
Commodity Futures Trading Commission (selected cases)
Consumer Financial Protection Bureau
Federal Deposit Insurance Corporation
Federal Energy Regulatory Commission (selected cases)
Federal Housing Finance Agency (settlements with investment banks)
Federal Reserve
National Credit Union Administration (settlements with investment banks)
Office of the Comptroller of the Currency
Securities and Exchange Commission (selected cases)
Treasury Department Financial Crimes Enforcement Network (money laundering cases)
Commodity Futures Trading Commission (selected cases)
Consumer Financial Protection Bureau
Federal Deposit Insurance Corporation
Federal Energy Regulatory Commission (selected cases)
Federal Housing Finance Agency (settlements with investment banks)
Federal Reserve
National Credit Union Administration (settlements with investment banks)
Office of the Comptroller of the Currency
Securities and Exchange Commission (selected cases)
Treasury Department Financial Crimes Enforcement Network (money laundering cases)
Cases Involving Non-Financial Companies:
Justice Department Antitrust Division, Civil Rights Division, Criminal Division and Tax Division
Bureau of Industry and Security (export violations)
Federal Trade Commission (all cases involving monetary penalties)
Office of Foreign Assets Control (export-control violations)
Securities and Exchange Commission (Foreign Corrupt Practices Act cases)
Treasury Department Alcohol and Tobacco Tax and Trade Bureau
From Greg LeRoy of Good Jobs First: $160 Billion in Penalties: Violation
Tracker 2.0 Documents Wide Variety of Misconduct by Major Banks
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