Watch: Sen. Elizabeth Warren Grills Regulators On Taking Banks To Trial
In her debut appearance today at a Senate Banking Committee hearing, Sen. Elizabeth Warren from Massachusetts made federal regulators uncomfortable when she asked a simple question: When was the last time you took a big Wall Street bank all the way to trial?
“Elisse B. Walter, chair of the SEC, said that although they can take financial institutions to trial, they typically do not go that route.
“‘As you know, among our remedies are penalties but the penalties we can get are limited,’ Walter said. ‘When we look at these issues, and we truly believe we have a very vigorous enforcement program, we look at the distinction between what we could get if we go to trial and what we could get if we don’t.’”
“We have not had to do it as a practical matter to achieve our supervisory goals,” Thomas Curry, the Comptroller of the Currency, which regulates national banks, added.
Warren said that she was worried that banks are simply paying fines from the profits they earned breaking regulatory rules.
“I want to note that there are district attorneys and U.S. attorneys who are out there everyday squeezing ordinary citizens on sometimes very thin grounds and taking them to trial to ‘make an example,’ as they put it,” Warren said. “I am really concerned that too-big-to-fail has become too-big-for-trial.”
Warren is not the first to express concern that the SEC is settling too many cases before going to trial.
Rakoff has argued that settling without a trial was not in the public interest. The SEC, he said, “has a duty, inherent in its statutory mission, to see that the truth emerges.” And that means taking some cases to trial.
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