A group of Democratic lawmakers is pushing for Secretary of
Labor Thomas Perez to consider the seriousness of the "criminal
behavior" of the global banks requesting waivers to continue
functioning without significant business interruptions, after they
agreed last month to enter guilty pleas.
The request is the latest salvo from lawmakers concerned that
big banks aren't being adequately punished by U.S. authorities.
In a letter sent on Thursday, Democratic lawmakers including
Rep. Maxine Waters of California and Sen. Elizabeth Warren (D.,
Mass.) called on the Department of Labor to hold a public hearings
to consider waiver applications from Barclays PLC, J.P. Morgan
Chase, Royal Bank of Scotland Group PLC and Citigroup Inc., all of
which agreed to plead guilty to conspiring to manipulate
foreign-exchange rates.
UBS AG agreed concurrently to plead guilty to manipulating
benchmark interest rates including the London interbank offered
rate, or Libor. It will also require a waiver, and the lawmakers
urged a public hearing on that request as well.
Such waivers are needed by the banks to continue to manage
assets for retirement funds, despite having pleaded guilty to
crimes.
"Five megabanks will continue doing business as if no crimes
were committed and, so far, suffer no collateral consequences," the
lawmakers wrote to Secretary Perez. "In determining whether to
grant these waivers, we urge you to give due weight to the
seriousness of their criminal behavior, their extensive recidivist
history, and the need to protect our nation's workers and retirees
from these bad actors."
The lawmakers said they were aware of waiver requests from
Barclays, J.P. Morgan, RBS and Citigroup.
UBS wasn't charged as part of the foreign-exchange probe.
However, the Swiss bank had been placed under investigation for
manipulating exchange rates, and its conduct prompted the Justice
Department to discard a previous, separate agreement struck in 2012
that spared the bank from charges related to manipulating
Libor.
In addition to their guilty pleas, the banks collectively agreed
to pay a total of $5.6 billion.
Pressure from lawmakers including Rep. Waters prompted the
Department of Labor to hold a hearing last January on whether to
grant Swiss bank Credit Suisse Group AG a waiver enabling it to
continue managing assets for retirement funds. Credit Suisse
pleaded guilty last year to helping U.S. clients evade taxes with
Swiss accounts. The bank was awarded a temporary waiver by the
Department of Labor, which is due to expire in November.
"Every day, we hear from our constituents and other members of
the public an increasing frustration with the two-tiered system of
justice that puts low-level offenders in jail while the rich and
powerful on Wall Street buy their way out of trouble," the
lawmakers said in the letter sent on Thursday.
Write to John Letzing at john.letzing@wsj.com
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