U.S. to banks: 'No such thing as too big to jail'

CNN

Kevin Johnson, USA TODAY 6:40 p.m. EDT May 5, 2014

WASHINGTON — Foreshadowing possible criminal charges against banking giants Credit Suisse and BNP Paribas, Attorney General Eric Holder offered an ominous warning Monday, saying, "There is no such thing as too big to jail.''

"Some have used that phrase to describe the theory that certain financial institutions, even if they engage in criminal misconduct, should be considered immune from prosecution due to their sheer size and their influence on the economy,'' Holder said during a weekly video message posted on the Justice Department website.

"That view is mistaken," Holder said. "And it is a view that has been rejected by the Department of Justice. To be clear: No individual or company, no matter how large or how profitable, is above the law. When the Department of Justice conducts investigations, we will always follow the law and the facts wherever they lead.''

Holder did not identify the targets of the inquiries by name, but a Justice official confirmed that federal prosecutors are close to wrapping up investigations involving the two banks and will probably announce criminal charges in the coming weeks. The official is not authorized to comment publicly on the pending criminal investigations.

Federal prosecutors have been investigating BNP for alleged violations of U.S. sanctions lodged against countries, including Iran and Sudan. Credit Suisse is being targeted for allegedly providing illegal tax shelters for Americans.

Credit Suisse declined comment Monday. BNP did not immediately respond to a request for comment.

The criminal inquiries have been proceeding as prosecutors and regulators attempt to resolve the matters without creating havoc in the larger financial system.

"It is true that criminal charges involving a financial institution can sometimes trigger serious follow-on actions by that company's financial regulators,'' Holder said Monday. "In some cases, it may even trigger the loss of the institution's charter.''

The attorney general said it would be "irresponsible not to consider'' such damaging results.

"But rather than wall off banks from prosecution, the potential for such severe consequences simply means that federal prosecutors conducting these investigations must go the extra mile to coordinate closely with the regulators that oversee these institutions' day-to-day operations,'' Holder said. "So long as this coordination occurs, it is fully possible to criminally sanction companies that have broken the law, no matter their size.''

Holder said the "cooperation will prove key in the coming weeks and months as the Justice Department continues to pursue several important investigations.''

"While I will not specify any particular targets, I will say this: I am personally monitoring the status of these ongoing investigations, I am resolved to seeing them through, and in doing so, I intend to reaffirm the principle that no individual or entity that does harm to our economy is ever above the law."