SEC Letting Big Banks Skirt Fraud Penalties
'New York Times' analysis finds 350 instances of banks getting free passes
By Kevin Spak,  Newser Staff
Posted Feb 3, 2012 7:13 AM CST
A woman walks past the bronze bull statue near Wall Street in lower Manhattan January 26, 2011 in New York City.   (Getty Images)
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(Newser) – The Securities and Exchange Commission has repeatedly allowed Wall Street's biggest banks to avoid penalties specifically intended to punish and deter fraud, a New York Times analysis of SEC records reveals. Over the past decade, the SEC has on almost 350 occasions granted waivers exempting big financial companies from sanctions, allowing banks like Goldman Sachs and JP Morgan to continue to enjoy advantages, like protection from shareholder lawsuits, that are supposed to be reserved for the most dependable companies.

Close to half of those waivers went to repeat offenders who had settled previous cases for the same fraud by promising never to do it again. JPMorgan Chase, for example, has settled six fraud cases over the past 13 years, but has received 22 waivers by arguing that it has "a strong record of compliance with securities law." But the SEC argues that the analysis ignores the waivers that haven't been awarded. "The companies don't ask when they know the answer will be no," one official said.