U.S. Justice Department mulls limits on overlapping corporate penalties
The U.S. Justice Department is exploring ways to prevent multiple law enforcement agencies from slapping companies with corporate penalties over the same underlying misconduct, a senior official said on Wednesday.
"Repeated punishment for the same conduct has the potential to undermine the spirit of fair play and the rule of law," Deputy Attorney General Rod Rosenstein, the department`s No. 2 official, said in prepared remarks to a New York conference held by The Clearing House banking trade group.
"This is why the department is committed to making a concerted effort to apportion penalties among both international and domestic agencies, where appropriate," Rosenstein added.
Big global banks in recent years have been forced to fork over billions of dollars to settle charges brought in the United States and sometimes abroad stemming from a variety of offences. These ranged from shoddy practices involving mortgage foreclosures and disclosure violations over the sale of toxic subprime mortgages to the manipulation of key benchmarks such as Libor and violating sanctions.
In many cases, such monetary settlements have involved multiple U.S. law enforcement and regulatory agencies and foreign governments that pursued the banks over the same underlying misconduct.
Having multiple offices pursue a single company over the same issue can result in a "piling-on problem" that can be unfair to the business, its employees and its shareholders, Rosenstein said.
The Justice Department is considering proposals to "improve coordination in those situations and to help avoid duplicative and unwarranted payments," Rosenstein said, though he did not elaborate on what those proposals could entail.
In response to a question by Bank of America Corp
Federal law requires banks to file these reports with the Treasury Department`s Financial Crimes Enforcement Network (FinCEN) to help the U.S. government detect money laundering. The reports are not always readable or written in a useful way, Rosenstein said.
FinCEN on Wednesday announced that it had tapped Kenneth Blanco, the acting head of the Justice Department`s criminal division, as its new director.
The Justice Department is in the process of reviewing a number of policies related to white collar crime.
Rosenstein previously said the department was reviewing a memo penned by his predecessor, Sally Yates, that urged federal prosecutors to emphasize holding individuals accountable for misconduct and to require companies to cooperate by providing information about possibly culpable employees.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.