New Report: The Rap Sheet For Wall Streets Biggest Banks Crime Spree
Over 350 Different Legal Actions, Almost $200 Billion in Fines and Settlements, $8.2 Trillion in Bailouts
Washington, D.C. – As the CEOs of Wall Street’s biggest megabanks appear before Congress, Better Markets is releasing a Report, “Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets & Ongoing Crime Spree.”
The Report, for the first time, details the Six Megabanks’ (1) taxpayer bailouts, (2) crime spree before, during and after the 2008 financial crisis, and (3) the fines and penalties involved.
“The Report released today details, for the first time, that, of the more than $29 trillion in total bailouts, the six biggest banks in the country (Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo) received more than $8.2 trillion, or nearly one-third of the total bailouts provided to the entire financial system,” said Dennis Kelleher, President and CEO of Better Markets.
One might think that receiving trillions of dollars of undeserved and lifesaving taxpayer bailouts would cause those financial institutions to reform their high-risk, destabilizing activities or, at a minimum, to rein in their predatory conduct and illegal practices. Think again. The banks showed no gratitude, no remorse, and no willingness to reform their activities. Worse, they also didn’t bother to end their systemic, widespread, and brazen illegal conduct.
2019 report
“These bailouts were sold to the American people as necessary to prevent the collapse of the financial system and to ensure that these banks continued to lend to the real economy. However, as the Report also details for the first time, these Six Megabanks have engaged in an unrelenting crime spree. It started before the 2008 crash, continued during the crash, and the number of major legal actions against these Six Megabanks has actually increased after the crash, as shown in the chart below,” continued Kelleher.
“Bernie Madoff was sentenced to 150 years in prison for one Ponzi scheme, yet these Six Megabanks have engaged in decades of ongoing illegal activities without any meaningful penalties. This shows that being saved from bankruptcy with $8.2 trillion in bailouts and that the almost $200 billion in fines, penalties
These Six Megabanks have committed hundreds of illegal acts and preyed upon and ripped off countless Main Street Americans with a frequency and severity that shocks the conscience. In fact, in the last two decades, while receiving more than $8.2 trillion in bailouts, these Six Megabanks have been subject to more than 350 major legal actions that have resulted in almost $200 billion in fines and settlements:
The shows the possible crimes and ethics violations that occurred Pre-crash, Crash-related, and Post-crash.
Pre-crash: Bogus charges for credit monitoring services, overdrafts based on false balance information, illegal bid rigging, tricking subprime borrowers into buying credit insurance, selling unnecessary credit-card add-on products, providing conflict-ridden stock research analysis, trading ahead of clients, misrepresentations in the sale of auction rate securities, anticompetitive practices in the bond market, unlawful payment schemes to win muni-bond business, misallocation of public offering shares, antitrust violations, excessive overdraft fees on checking accounts, and opening millions of fake accounts;
Crash-related: Fraud and abuse in the sale of mortgage-backed securities, loan servicingand foreclosure violations, betting against mortgage-backed securities that were sold to clients, use of invalid credit ratings for mortgage-backed securities, and steering subprime borrowers into more costly loans and falsifying income information;
Post-crash: Unlawful debt collection practices, breach of fiduciary duty, market manipulation, anti-money laundering violations, unlawful securities lending practices, claims relating to the London Whale derivatives trades, abuses in the sale of credit monitoring services, error-ridden debt collection practices, failure to disclose adviser conflicts of interest, misrepresentations about foreign exchange trading programs, forcing clients into insurance policies, and kickback schemes involving title insurance.
Even though these big banks we caught doing things illegally, the penalties for their crimes are so minor in comparison that it does nothing to change their behavior.
Moreover, it is clear that all these fines and settlements have been grossly inadequate. They have not been nearly enough to punish these banks for their prior illegal behavior or to deter them from engaging in future illegal conduct. In fact, it appears that these fines and settlements are just a cost of doing business, a speed bump on the road to ever larger bonuses, however they are generated.
[The full report can be found here.]
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