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Feds Look to Secure Guilty Pleas From Major Banks for Criminal Wrongdoing

063_credit_suisseThe government may be on the verge of actually prosecuting major banks for dirty dealings.

Ever since the financial meltdown crippled economies across the globe seven years ago, we have been hearing the public outcry over the government’s failure to prosecute the huge banks. But according to a story in The New York Times, the prosecutors in New York and Washington have set their sights on Credit Suisse for offering tax shelters to Americans and BNP Paribas, France’s largest bank, for doing business with countries like Sudan and Iran that are under U.S. sanctions.

The cases could produce the first guilty plea from a major bank in more than two decades, according to the Times.

Prosecutions against these companies, although not for the willful fraud involving mortgage-backed securities that led to the financial meltdown, would go far in countering the public perception that the government believes these institutions are “too big to jail.”

Prosecutors are seeking a way to criminally punish banks without putting them out of business and damaging the economy, interviews with lawyers and records reviewed by The New York Times indicate.

Lawyers told the Times that prosecutors are engaged in talks with BNP, which has a huge investment bank in New York, to gain a guilty plea from the bank’s parent company. In response, the bank has enlisted the support of high-ranking French officials to pressure prosecutors.

During a meeting at the New York Fed’s headquarters in Lower Manhattan, Benjamin M. Lawsky, New York’s top financial regulator, said he planned to impose steep penalties against BNP and its employees but promised he would not revoke the bank’s license.

Attorney General Eric H. Holder Jr. told a congressional hearing last year, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them.

Holder’s criminal division has held discussions with the New York Fed about securing a guilty plea in the Credit Suisse tax shelter case, according to the Times.

Representatives for BNP and Credit Suisse declined to comment.


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