Ranking member of the House Committee on Oversight and Government Reform, Representative Elijah Cummings, Maryland Democrat, has stepped up pressure on Securities and Exchange Commission (SEC) Chairwoman Mary Jo White, asking her to explain why major banks received waivers despite admissions of guilt to felony charges.
The letter from Cummings, an influential House Democrat, comes as the appointee of President Barack Obama has been publically ridiculed from the left, over her alleged soft attitude toward Wall Street.
Cummings letter calls out waivers granted by the SEC to Barclays PLC (BCS - NYSE), Citigroup Inc. (C - NYSE), JPMorgan Chase & Co. (JPM - NYSE), Royal Bank of Scotland Group plc (RBS - NYSE) and UBS Group AG (UBS - NYSE) - all of who plead guilty to criminal violations related to the manipulation of the foreign exchange markets. His letter asks White and her staff at the SEC to explain the process for evaluating waiver requests and whether the banks’ status as repeat offenders factored into the decision to grant a waiver or not. While conspiring to fix prices and rig bids for U.S. dollars and euros, traders within each bank identified themselves as “The Cartel” and “The Mafia”.
The Oversight committee is particularly interested in understanding how the SEC will monitor the banks compliance with the terms of these agreements, since their repeat offender status demonstrates a tendency to commit additional civil and criminal acts even while under deferred prosecution or non-prosecution agreements that prohibit additional crimes.
To avoid being barred from certain business activities such as securities offerings on expedited term, the banks simultaneously negotiated the waivers and exemptions with the SEC, while negotiating their guilty pleas and penalties.
To allow for additional benefits such as raising unlimited amounts of money from the public, Barclays and UBS also applied for “bad actor” waivers.
In a statement on August 27 from Luis Aguilar, SEC Commissioner, he said he was unaware some waivers were denied by SEC staff without ever coming before the Commission for consideration or a vote. Since Aguilar’s statement implied that the SEC is still not keeping full and complete records of all activity in this area, Cummings is seeking more information about all waivers requested, denied, considered or approved.
White said she directed the staff to keep better track of waivers, including those that have not been granted, during a speech in March 12, 2015.
Contributed by Millennium Traders