Has Too Big to Jail Finally Been Overcome?

We finally have a felony conviction, aiding and abetting tax evasion, for the major bank Credit Suisse, but what are the penalties?  For starters the bank will be fined $2.6 billion, a fair hunk of change to be sure, but the CEO Brady Dougan said this in a press statement, so where's the beef?

Dougan said the settlement had had little impact on business. “We have found no instances where clients cannot do business with us,” he said. “Our discussions with clients have been very reassuring and we haven’t seen very many issues at all.”

So much for feeling too much pain, now does he go to jail?  Not a chance in my opinion, even if Switzerland extradited him which they won't. Then there's the matter of the tax evaders, Credit Suisse hasn't been required to reveal who they are so the IRS can collect taxes from them, as well as prosecute them.  That has Senators Carl Levin and John McCain puzzled too after they did all the investigative work that led to the conviction.

Senators Carl Levin and John McCain welcomed the $2.6bn fine of the bank announced Monday but said more needed to be done. Levin and McCain led the permanent subcommittee on investigations team that uncovered much of the wrongdoing at the bank.

In a statement, Levin said it was “appropriate” that Credit Suisse had been held criminally liable for aiding and abetting tax evasion – the first bank of this scale to held criminally liable for 20 years.

He said the fine struck “an important blow against tax evasion through bank secrecy”.

“But it is a mystery to me why the US government didn’t require as part of the agreement that the bank cough up some of the names of the US clients with secret Swiss bank accounts. More than 20,000 Americans were Credit Suisse account holders in Switzerland, the vast majority of whom never disclosed their accounts as required by US law. This leaves their identities undisclosed, with no accountability for taxes owed. The changes Credit Suisse has agreed to make to its practices are long overdue and welcome, but must be carefully monitored,” he said.

McCain said he was “gratified” by the Justice Department’s decision to require Credit Suisse to plead guilty to criminal wrongdoing. “In such cases, it is vitally important for all Americans to know that no financial institution is ‘too big to prosecute,’” he said. But he added that questions remained.

“Over the next few days, I look forward to reviewing this guilty plea closely to see whether it appropriately holds officers, directors and key executives individually accountable and whether the plea will be sufficient to help deter similar misconduct in the future,” he said.

In The Guardian story, they interviewed  John Coffee, Adolf A Berle professor of law at Columbia Law School, and he said.

“It is less than a severe sanction when no officers are indicted, when the settlement does not require the dismissal of any employees and where they do not get the names of these US customers,” he said. He said other regulators could take further action, the SEC could bar it from being a money manager, but that was not going to happen.

“Mary Jo White [chair of the SEC] does not want to inconvenience a major bank over a little thing like a federal felony conviction,” he said.

SEC and Mary Jo White

She is a perfect example of the revolving door between Wall Street and Government regulators, and she has such a mass of conflicts of interest that she shouldn't have ever been considered, but instead she now heads the SEC, government watchdog of the markets.  Mister President, if you're listening, this stinks.

She has servered all the titans, JP Morgan, Goldman Sachs, GE - you name it she served them, but now she says she'll make them toe the line.  Uh Huh.  In an article on Truthout Mark Karlin says  

"Mary Jo White will be collecting $42,000 a month in retirement pay for life from Debevoise & Plimpton. As Bloomberg reported, “This means she has a direct interest in Debevoise’s future profits, and therefore an incentive to help make sure only good things come the firm’s way. Debevoise’s partner-retirement plan is unfunded, meaning the firm pays benefits from its continuing business operations.”

"The New York Times reports that White and her husband, who’s also a corporate litigator, have a net worth of at least $16 million and investments that might be valued as high as $35 million. Now, courtesy of President Obama, Mary Jo White’s been named to head the SEC, the Securities and Exchange Commission — the very agency that regulates her clients and everyone else doing business in the stock market."

 

SEC nominee made millions defending banksters

I think this story should get the "aw shit" award of the week. 

Mary Jo White has made millions representing the banksters during the financial meltdown making her a blatant conflict of interest, and now she is Obama's choice for head of the SEC. She is of course lauded by Forbes (representing the creme de la creme of Wall Street) and they chortle about the alternative, "While in some cases lawyers do not manage the transition well or wisely, what is the alternative to professional movement:  career government lawyers chained to their desks?  Could we attract talented lawyers to public service without the freedom to reenter private practice?  Would we want government lawyers who represented only one side for their entire careers?".  (Translated:  "Yeah, we went to the dark side, but we're good at what we do.")

She doesn't have my confidence at all.