Sen. Elizabeth Warren (D-Mass.) requested on Tuesday that Attorney General Eric Holder, Federal Reserve and SEC release information on the costs to the taxpayer of enforcement actions without an admission of guilt.
In February, Warren asked Thomas J. Curry, the comptroller of the currency, whether the OCC had conducted any analyses on the costs and benefits of a settlement without admission of guilt, but Curry said the agency did not have such data.
Warren said that while litigation is expensive and taxing on resources, a regulator’s lack of willingness to take big financial institutions all the way to trial results in a lack of leverage in settlement negotiations, which could force them to settle on less favorable terms.
“The consequence can be insufficient compensation to those who are harmed by illegal activity and inadequate deterrence of future violations,” Warren said. “If large financial institutions break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law.”
Warren told the Fed, SEC and Holder that she seeks to obtain more information on how the numerous offices have evaluated the cost to the public of settling cases without admission of liability.