Massachusetts Sen. Elizabeth Warren (D) used her debut on the Senate Banking Committee to question financial regulators about the lack of accountability for Wall Street banks’ role in the financial crisis, challenging them to name the last time a Wall Street bank was taken to trial over allegations of fraud and other crimes instead of being allowed to settle out of court.
“What I’d like to know is, tell me a little bit about the last few times you’ve taken the biggest financial institutions on Wall Street all the way to a trial,” Warren asked the regulators. But none provided a specific answer. That led Warren to wonder if Wall Street banks had become “too big for trial”:
WARREN: I just want to note on this: there are district attorneys and U.S. Attorneys who are out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial in order to make an example, as they put it. I’m really concerned that “too big to fail” has become “too big for trial.”
Watch it (at 3:50):
Prosecution of financial fraud hit a 20-year low in 2011, even amid broad findings of fraud that took place at the biggest banks. The government has instead reached settlements over mortgage and foreclosure fraud, and other alleged crimes with a multitude of banks, and while those settlements are significant, they have also been plagued with problems. And as Warren noted, settling out of court has also prevented the public from “days of testimony” from banking officials that would result from trials.
Though Warren came to the Senate with a reputation for being tough on banks, she is hardly alone in her criticism of the lack of legal action that has been taken against them. Iowa Sen. Chuck Grassley (R-IA) blasted the “get-out-of-jail-free card” the banks seem to hold, and he and Sen. Sherrod Brown (D-OH) petitioned the Justice Department last month over concerns that big banks had become “too big to jail.”