August 20, 2019

Warren Seeks Answers from DOJ and US Attorneys on Weak Settlements with Barclays and Royal Bank of Scotland for Their Roles in the 2008 Financial Crisis

"Top Echelons of Trump DOJ" Reportedly Forced Prosecutors to Reduce Fines Imposed on Banks

Letter to DOJ (PDF) | Letter to USAOs (PDF)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) today sent letters to the Department of Justice (DOJ) and U.S. Attorneys' Offices (USAOs) for Massachusetts and the Eastern District of New York requesting information about recent settlements finalized with Barclays Capital Inc. (Barclays) and the Royal Bank of Scotland (RBS) for their role in the 2008 financial crisis. The senator's letters follow recent reports that "well-connected lawyers" representing the two major banks implicated in the 2008 financial crisis used their "access to the top echelons of the Trump DOJ" to reduce the fines imposed on these banks for their roles in the crisis. 

"These weak settlements send a clear message to financial institutions and white-collar criminals that they can evade accountability as long as they are wealthy and well connected," Senator Warren wrote in her letter to DOJ.

According to a ProPublica and American Banker report earlier this month, senior DOJ officials appointed by President Trump forced staff prosecutors in the USAOs for Massachusetts and the Eastern District of New York to reduce the amount Barclays and RBS would have to pay to settle lawsuits stemming from their role in the 2008 financial crisis. As a result, the final settlements were reported to have left "billions of dollars in potential recoveries on the table" and dismissed civil charges against two former Barclays executives who did not have to admit wrongdoing and "might not have to pay a dime out of their own pockets."

When prosecutors in the USAOs initially brought charges against the two banks in 2016, analysts estimated that the DOJ could impose a fine of up to $12 billion for RBS and $5 billion for Barclays for the fraudulent practices they employed leading up to the financial crisis. However, after the reported intervention of a cadre of DOJ officials appointed by President Trump -- including former Deputy Attorney General Rod Rosenstein, Deputy Associate Attorney General Stephen Cox, and former Principal Deputy Associate Attorney General Jesse Panuccio -- the prosecutors were reportedly instructed to forego criminal charges and settle for only $4.9 billion with RBS and $2 billion with Barclays. According to the report, the banks, represented by a collection of former high ranking DOJ officials, used their influence with top DOJ officials appointed by President Trump to help significantly reduce the final penalty amounts.

"It is unconscionable that the Administration is refusing to hold corporate criminals fully accountable for their role in the financial crisis," the senator continued. "The American public has a right to know how and why prosecutors who worked to hold banks responsible for the financial crisis were forced to agree to meager settlements that amount to pocket change for the banks."

Senator Warren's letter asked the DOJ and U.S. Attorneys to answer, by September 2, 2019, a series of questions about circumstances surrounding these settlement agreements.

Earlier this year, Senator Warren and Representative Pramila Jayapal (D-Wash.) released a report, Rigged Justice 2.0: Government of the Billionaires, by Billionaires and for Billionaires, which found that "our justice system's soft touch with huge corporations and billionaires is not a new phenomenon. But under President Trump, it is far worse than it has ever been."

Senator Warren has also introduced legislation to end this coddling of corporate wrongdoers, including: