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Justice Department Prepares Criminal Charges Against 5 Banks

J.P.Morgan logo The New York Times reported on Friday that the U.S. Department of Justice is preparing an announcement that five banks will plead guilt to criminal charges:

"... Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies... Most if not all of the pleas are expected to come from the banks’ holding companies... a first for Wall Street giants that until now have had only subsidiaries or their biggest banking units plead guilty."

U.B.S. logo Last week, a federal court in New York City ruled that the Royal Bank of Scotland (RBS) was liable for mortgage abuses. The fifth bank includes:

"... foreign currency misconduct at UBS. As part of that deal, prosecutors are taking the rare step of tearing up a 2012 nonprosecution agreement with the bank over the manipulation of benchmark interest rates..."

Citibank logo Most of the same banks paid about $4 billion in fines in 2014 for foreign exchange abuses. There is some maneuvering happening:

"... the banks’ lawyers are also seeking assurances from federal regulators — including the Securities and Exchange Commission and the Labor Department — that the banks will not be barred from certain business practices after the guilty pleas, the people said. While the S.E.C.’s five commissioners have not yet voted on the requests for waivers, which would allow the banks to conduct business as usual despite being felons, the people briefed on the matter expected a majority of commissioners to grant them."

Will bank executives go to prison? They should. Felons usually serve jail time and are barred from certain businesses. Rather, only the poor and not-connected-politically felons seem to experience these consequences.

This banking misconduct will continue as long as the money they make exceeds the fines, they can raise fees to easily pay for any fines, the fines and penalties are tax deductible, and the risk of going to jail is low. This must change. It's time for voters to gather your torches and pitchforks.

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