Time to Crack Down on Recidivist Banks Instead of Slapping Wrists
Ordinarily, people face far greater punishment each time they are caught committing another crime. Federal sentences for recidivists go up dramatically.
But like green-shaded teflon dons – mobster John Gotti’s nickname for managing to stay out of jail – the largest banks have been repeatedly prosecuted over the past decade and yet have so far avoided any harsher consequences. Instead they’ve received “deferred prosecutions” or non-prosecutions that trade criminal charges for promised reforms and criminal fines.
Now, as a new wave of bank prosecutions threatens to crash over Wall Street, it is time for clearer rules for recidivist banks and corporations more generally. Last week, the Department of Justice seemed to be finally leaning in that direction when it issued warnings that it “will not hesitate to tear up” corporate settlements if they are violated.