Wall Street Firms Win Again, Regulators Capitulate

Monday, August 7, 2017
By Paul Martin

by Wolf Richter
Aug 7, 2017

Financial Crisis is forgotten. Even sounds of gentle wrist-slapping fade.

Penalties imposed during the first half of 2017 on Wall Street firms by their regulators — the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC), and the Financial Industry Regulatory Authority (Finra) — plunged 65% compared to the same period in 2016.

During the first half in 2016, $1.4 billion in fines were levied on Wall Street firms by the three regulators. In 2017, the total was down to $489 million, according to data collected by The Wall Street Journal.

In this context, Wells Fargo doesn’t have much to fear after admitting a week ago that since 2012 it had quietly added unneeded comprehensive and physical damage insurance to the car payments of 570,000 (or 800,000) of its auto-loan customers.

The SEC imposed $318 million in fines in the first half, down 58% from the same period a year ago, based on The Journal’s search of federal documents and publicly available records on the SEC’s website, along with data provided by University of Virginia law school professor Andrew Vollmer.

In the first six months of 2016, the SEC imposed $750 million in penalties. This included a case filed in June that year with a penalty of $358 million; it alleged a bank had misused customer assets. By contrast, the largest fine so far this year has been a soft slap on the wrist of $30 million.

The Journal explains:

SEC Chairman Jay Clayton, who took over in May, has expressed concern about the size of corporate penalties the SEC has levied in recent years, saying they hurt shareholders and it would be better to punish guilty individuals.

At the CFTC, the fines imposed in the first half plunged 74%, to $154 million. In the first half of 2016, fines had reached $603 million, which included Libor-rigging and Euribor-rigging cases, with Goldman Sachs alone getting docked for $120 million.

The Rest…HERE

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