Verdicts & Settlements

Judge Hits Barclays ‘Sweetheart Deal,’ Asks Why DOJ Isn’t ‘Rough with Banks'

The average citizen who robs a bank doesn’t get a deferred prosecution agreement, according to U.S. District Judge Emmet Sullivan. So why should British bank Barclays get deferred charges in a federal trade sanctions case?

The Washington, D.C., judge criticized federal prosecutors Tuesday for a proposed $298 million settlement resolving charges that Barclays violated U.S. trade law by hiding transactions in sanctioned countries including Cuba, Iran and Libya, according to stories by Reuters and the Wall Street Journal (sub. req.).

“This is a sweetheart deal,” Sullivan said. “Why isn’t the government getting rough with these banks?”

Sullivan questioned whether the bank was being penalized if it was forced to return only the money involved, according to the Reuters account. But Justice Department lawyer Frederick Reynolds said the proposed Barclays payment was “beyond what they earned.”

The Wall Street Journal says Sullivan’s comments “are the latest example of what some legal experts call a pattern of increasing displeasure from the bench about how the U.S. government is resolving investigations of major financial institutions.” On Monday, U.S. District Judge Ellen Huvelle questioned a proposed Citigroup settlement. Last September, U.S. District Judge Jed Rakoff rejected an initial settlement with Bank of America.

Lawyers will appear in court on Wednesday to respond to Sullivan’s concerns.

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