Again affirming her identity as the lawmaker trying to hold Wall Street accountable, Sen. Elizabeth Warren, D-Mass., is pushing federal agencies over their failure to prosecute a single banking executive despite ample evidence of fraudulent activity leading up to the 2008 crisis.
In a letter to Attorney General Eric Holder, current Securities and Exchange Commission Chairwoman Mary Jo White and Federal Reserve Chairman Ben Bernanke, Warren challenges decisions to settle with banks, offering a slap on the wrist, as opposed to jail sentences. whether they had done any cost-benefit research into prosecuting a bank versus settling with one, which is equivalent to a slap on the wrist for a profitable financial institution.
Echoing language of Occupy activists like former Wall Street V.P. Alexis Goldstein, Warren stressed how failing to bring banks to trial can create a culture of impunity. She asked the federal agency heads to respond to her concerns, writing:
I believe strongly that if a regulator reveals itself to be unwilling to take large financial institutions all the way to trial — either because it is too timid or because it lacks resources — the regulator has a lot less leverage in settlement negotiations… If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law.