Why Isn’t the Justice Department Bringing Treasury-Rigging Charges Against Wall Street?

There are only so many times the Justice Department can charge the largest Wall Street banks with felony counts for rigging markets before the public catches on that it’s a feature not a bug of their business model

By Pam Martens and Russ Martens of Wall Street on Parade

The U.S. Department of Justice has had an ongoing investigation into the potential rigging of the U.S. Treasury market by big banks on Wall Street for the past three years according to a series of past media reports. And yet, no formal charges have been brought. Lots of Wall Street watchers are wondering why – especially since private law firms have brought very specific charges in the matter into Federal court.

There are only so many times the Justice Department can charge the largest Wall Street banks with felony counts for rigging markets before the public catches on that it’s a feature not a bug of their business model. Continuous rigging charges could lead to growing public demands and newspaper editorials to break up these serially-charged behemoths at a time when members of Congress – who depend on the largess of Wall Street to run their political campaigns – don’t want to anger their major donors by endorsing legislation to break up the banks.

Two of the five largest U.S. banks by assets, JPMorgan Chase and Citigroup, already have four criminal felony counts between them. Two of JPMorgan Chase’s felony counts stem from how it handled Ponzi-king Bernie Madoff’s main business bank account for decades and failed to report highly suspicious activity as it is required to do under Federal law. Those two counts came in January 2014. The very next year, both JPMorgan Chase and a Citigroup unit, Citicorp, were slapped with one felony count each for their involvement in the rigging of foreign currency markets. The banks have admitted to all of the felony charges. Two foreign banks that are also active on Wall Street, Barclays PLC and the Royal Bank of Scotland (RBS), also pleaded guilty and received one felony count each in the foreign currency matter that was announced on May 20, 2015. On the same date, UBS, another mega Wall Street bank, pleaded guilty to rigging the interest rate benchmark known as Libor.

Unknown to most of the general public is the fact that these same mega banks on Wall Street that are repeatedly charged with abusing their customers and the public interest also play a critical role in helping the U.S. government finance its debt and help the Federal Reserve in carrying out its monetary policy

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