DOJ toughens its Wall Street strategy, but critics see only a ‘symbolic reprimand’
By Debra Cassens Weiss
Feb 20, 2013, 11:30 am CST
The U.S. Justice Department has a new, slightly tougher strategy in its pursuit of Wall Street wrongdoers.
Rather than settling for deferred prosecution agreements, the department is seeking criminal guilty pleas from bank subsidiaries, the New York Times DealBook blog reports. The model was used against UBS and the Royal Bank of Scotland when the banks’ Japanese subsidiaries pleaded guilty to felony wire fraud to resolve allegations of interest-rate rigging. The approach will now be broadly applied to financial fraud cases, the story says.
The government toughened its strategy after facing criticism that prosecutors let banks off too easy for wrongdoing contributing to the financial crisis. By obtaining guilty pleas from a subsidiary rather than the parent financial institution, the DOJ allows the parent to keep its license, the story says.
Some say the policy change doesn’t go far enough, DealBook says. “Critics question whether the new strategy amounts to a symbolic reprimand rather than a sweeping rebuke,” the story says.