Warren Presses Agencies on Enforcement Against Illegal Actions in Financial Crisis
By Jeff Bater
Oct. 23 –A U.S. senator is prodding federal regulators on their treatment of those who broke the law during the financial crisis and asking for information on enforcement actions.
Sen. Elizabeth Warren (D-Mass.) wrote a letter to Federal Reserve Chairman Ben Bernanke, Securities & Exchange Commission Chairman Mary Jo White, and Comptroller of the Currency Thomas Curry highlighting “the stellar enforcement record” of the special inspector general of the Troubled Asset Relief Program. SIGTARP has the authority to supervise the Wall Street bailout program and investigate any actions taken under the program. In her letter, she laid out the work SIGTARP has done against financial crisis crime, while pointing out the agency’s enforcement budget and staff were small compared with those at the Fed, the SEC, and the OCC.
“While we must continue working to create jobs and accelerate our economic recovery, we also must look back to ensure that those who engaged in illegal activity during the crisis and its aftermath are held accountable,” Warren wrote.
There has been some cracking down in connection with the crisis. For instance, a unit of UBS Aug. 6 agreed to pay almost $50 million to resolve SEC allegations that it misled investors in the structuring and marketing of a collateralized debt obligation in the spring of 2007.
“There have been some landmark settlements in recent weeks for which your agencies and others deserve substantial credit,” Warren said. “However, a great deal of work remains to be done to hold institutions and individuals accountable for breaking the rules and to protect consumers and taxpayers from future violations. Strong enforcement is an important deterrent, and I believe transparency is critical.”
It isn’t the first time Warren has challenged regulators on enforcement. Warren is a longtime consumer advocate who served as a driving force behind the creation of the Consumer Financial Protection Bureau. She was not tapped to head that new agency but did win a Senate seat last year and was picked to serve on the Senate Banking Committee. At the panel’s first hearing of the new session of Congress, assembling seven regulators to testify on Wall Street reform oversight, her first question was on the treatment of big banks that violate the law.
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The letter is available at http://www.warren.senate.gov/files/documents/SIGTARP%20Letter%202013-10-23.pdf.