Pressure from the American public and certain legislators may test the “too big to jail” presumption for major Wall Street firms involved in alleged illicit practices. In fact, criminal investigations into two industry titans have raised fears of the possibility of revocation of charter, which is akin to a banking ‘death penalty.’
The Wall Street Journal and the New York Times both reported this week that French giant BNP Paribas and Swiss giant Credit Suisse may be facing criminal charges.
According to the Times, federal prosecutors and financial regulators have been conferring on how best to pursue criminal charges against offending banks without putting them out of business entirely and potentially threatening economic health overall.
While other institutions are under investigation, the Times reports that the most advanced cases against financial heavyweights are BNP Paribas and Credit Suisse, the former of which is accused of conducting business with blacklisted nations and the latter of which is accused of providing tax shelters to Americans.
According to the Times, which has reported extensively on this story, corporate prosecutions that might impact the nation’s economic health must be given special consideration under federal guidelines, hence the collaborative discussions among prosecutors and regulators, each of whom answers to different authorities and who are bound by different obligations. An ongoing concern, according to the report, is adequately prosecuting alleged criminal behaviors without that resulting in the revocation of an institution’s charter.
Financial institutions and their Compliance professionals are likely following this story with a keen interest and considering their own CDD and KYC solutions.
