Investment banks convicted of manipulating currency rates should be not be allowed to manage pension money on behalf of US workers without proper public scrutiny, Democrat lawmakers have said.
Four banks—Barclays, JP Morgan Chase, Citigroup, and the Royal Bank of Scotland (RBS)—were last month fined more than $2.5 billion collectively for attempted rigging of currency rates. In addition, UBS was fined $203 million after pleading guilty to wire fraud and involvement in attempted LIBOR fixing.
“The public [has] 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.” —Democrat letter to Thomas PerezBarclays, JP Morgan, RBS, and Citigroup have applied for waivers from measures that would ban them from continuing to do business with pension funds, according to a June 4 letter to US Labor Secretary Thomas Perez. In the letter, 12 Democratic Party senators and representatives, including Massachusetts Senator Elizabeth Warren and California Representative Maxine Waters, called for a public hearing into the waiver requests.
“In determining whether to grant these waivers,” the politicians wrote, “we urge you to give due weight to the seriousness of their criminal behaviour, their extensive recidivist history, and the need to protect our nation’s workers and retirees from these bad actors who have admitted to misappropriating client information and overcharging them for over five years.”
Between them, the five banks mentioned in the letter manage more than $300 billion in pension money on behalf of public, private, and individual pension plans.
All firms involved have stated they have taken “appropriate disciplinary actions” against individuals involved and made efforts to improve compliance and oversight systems.
“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 politicians wrote.
They also called for Perez and his department to “establish a more rigorous, fair, and public process” for determining waivers for these and similar offences in future.
“We are deeply disappointed that the Securities and Exchange Commission, in waiving similar collateral consequences, rubber-stamped ten waivers for these institutions with zero transparency or public input,” the Democrats wrote, in reference to previous fines for other misdemeanours. “We encourage you not to make this same mistake.”
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