Finance

Justice Department puts Wall St. execs on notice

The Justice Department is placing more emphasis on seeking out and punishing individuals when institutions go bad, responding to years of gripes that the government has taken a soft approach toward bad actors and elsewhere in the business world.

The department sent out a memo outlining the new policies, which, according to The New York Times, instructs civil and criminal investigators to focus on individual wrongdoing from the start of a probe.

{mosads}The shift marks one of the most prominent steps taken so far under new Attorney General Loretta Lynch, who took over for Eric Holder as the government’s top cop in April.

For years, the government has struck massive settlements against some of the biggest names in finance for their roles leading up to the financial crisis. The government has also struck some large settlements with banks for a host of other bad actions, including helping nations evade U.S. sanctions and manipulating key interest rates for profit.

But the multibillion dollar settlements have done little to assuage some of the fiercest critics of the finance sector, who argue that since no bank executives faced individual charges, those fines amount to little more than the cost of doing business.

Sen. Elizabeth Warren (D-Mass.) has been among the toughest voices on the matter, as the big-bank critic has frequently taken the Obama administration to task for failing to do more to prosecute bad actors on Wall Street.

“If you steal $100 on Main Street, you’re probably going to jail. If you steal a billion bucks on Wall Street, you darn well better go to jail, too,” she said at a 2014 hearing.

Warren’s office said Thursday the senator has requested a briefing on the policy shift, but did not have an immediate reaction to the move.

The Wall Street reform advocacy group Better Markets took an extremely cautious tone towards the directive.

“Based on their past abysmal record on Wall Street, no one should believe what DOJ says until they see actual, concrete and repeated prosecution of supervisors and executives at Wall Street’s biggest, wealthiest and most politically connected too big to fail banks,” said Dennis Kelleher, the group’s president and CEO.

Holder was frequently the target of such criticism, particularly after he suggested at a congressional hearing in 2013 that it was difficult to pursue cases against some banks because of their size and influence on the U.S. economy.

Holder went on to step back from those remarks, repeatedly saying that no institution was “too big to jail.”

But under Lynch, a renewed emphasis on seeking out and punishing individuals could finally be the aggressive approach Justice Department critics have been seeking for years.

This post updated at 12:13 pm.

Tags Elizabeth Warren Eric Holder

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