Sen. Warren Presses Regulators on Enforcement Actions' Effectiveness to Deter Wrongdoing
Feb 6, 2014
WASHINGTON, DC - At a Senate Banking Committee hearing today, United States Senator Elizabeth Warren asked federal financial regulators about their enforcement strategies, and whether the current enforcement system is effective at deterring future wrongdoing. Sen. Warren highlighted recent government settlements with JPMorgan, noting that the company gave CEO Jamie Dimon a 75 percent raise following the settlements.
"The question I'm asking is whether or not there's adequate deterrent to prevent the largest financial institutions in this country from breaking the law," said Senator Warren. "Right now, if financial institutions can just settle their claims out of court, and get a raise for settling them, then where's the deterrent?"
Senator Warren pressed regulators about their current enforcement efforts, noting that the "the public has little confidence in regulators' willingness to seek the kind of penalties that will actually deter future financial crimes."
"Jamie Dimon himself said on CNBC a couple of weeks ago that JPMorgan could never afford a public trial," Senator Warren said. "He said, I'm quoting here, 'Banks have a very tough time doing that. That would have been criminal for me to subject our company to.'"
She cited comments from JPMorgan's Board of Directors indicating that Dimon received his raise in part for his efforts to negotiate favorable government settlements.
"I think this raises questions about whether our enforcement strategy is working or whether it's actually so bad that we're making it more likely for big banks to break the law," Senator Warren said.
To watch Senator Warren's Q&A at the hearing, please click here.