Finally the Judicial system, the lone branch of government that does not have to sell-out for its job security, is waking up. The decision highlights the relatively innocuous headline on Bloomberg, “Barklays Follows Citigroup With Court Rejection of US Accord”. What the heck does the mean? I nominate that for worst headline of the day. Here is the meat:
In yesterday’s hearing, Sullivan said the Barclays settlement “concerns the court.” Unlike the London-based firm, the average American caught robbing a bank doesn’t get deferred prosecution and the option of returning ill-gotten gains, he said.
Let’s hear it for the judge! Someone “gets it”. There is a trend, still timid, towards “getting it”. These are small but meaningful steps. The courts are starting to reject the sweetheart deals that allow banks and other firms to pay back a small portion of their ill-gotten profits from illegal activities. In some cases the settlements are obscene and are met with celebration by the guilty parties. But perhaps the days of those celebrations are ending.
Perhaps the days of hiding behind the corporate shield will be ending soon as well. Individual prosecutions must follow corporate prosecutions.
U.S. agencies and prosecutors, taking note of the decisions, will begin trying harder to deliver the executives responsible for misconduct, Doty said.
In one of the more obscene settlements, a former Citigroup CFO, still in a lucrative position with the firm, paid back a measly $80,000 in fines for deliberately misleading investors.
Former Chief Financial Officer Gary Crittenden, who left New York-based Citigroup last year, agreed to pay $100,000 to settle claims he didn’t disclose the risk after getting internal briefings.Arthur Tildesley, Citigroup’s former head of investor relations, will pay $80,000 to settle claims that he helped draft disclosures that misled investors, the SEC said. Tildesley now heads cross-marketing at Citigroup, according to the agency.
The matter was administrative, not criminal. See the SEC filing for details. The penalties for robbing the people must be stepped up with greater individual accountability and in appropriate cases, where there would be many, jail time. As highlighted in this prior post, the current criminal system remains biased against smaller property crime and in favor of major white-collar crimes that are clearly larceny on a greater scale. Note also this, and this, and this.