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Wednesday, November 18, 2015


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Chanson de Roland

And, if you think that JPMorgan has a colorful history, you should review the history of UBS and Credit Suisse Group.

Given this litany of wrongdoing by the major banks, I think that it is long past time for several of these banks to be deemed criminal enterprise and indicted and convicted under RICO (Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961–1968). Section 1961 of RICO expressly makes financial-institution fraud a RICO crime, and other provisions of Section 1961 would comprehend the many of several banks' wrongful acts as RICO crimes. Several provisions of Section 1962 would make the actions of several senior banking executives crimes and would prohibit them from being involved in the management of any bank or financial institution; other provisions of Section 1962 would also be applicable.

For these bad acts RICO provide powerful civil and criminal sanctions, some of which, such as liquidating the major banks and winding up their affairs, no judge in his right mind would do. But other provisions that would permit civil damages to make victims whole and other provisions, both criminal and civil, would permit a judge to appoint a special master to reform a guilty bank by reforming its business practices, reforming its culture, and replacing its management, all of which could be done without jeopardizing the operations, assets, liabilities, revenues, and/or profits of any guilty bank, unless one is of the view that these banks are not profitable when operated as legal enterprises. And what is very appealing are the powerful sanctions that can be had against bank executives who have committed predicate crimes that would also constitute a RICO violation.

If we can't justly and judiciously use RICO against banks that satisfy its elements of action, then we have a RICO statue that can only be used against, as a law professor of mine put it, those with Italian sir names. But that isn't the law; RICO should be applied wherever it is applicable. And it looks to be applicable against several of the big banks and their senior leadership.

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