News Column

Holder: No bank is 'too big to jail'

May 5, 2014

By Kevin Johnson, and Kevin McCoy, USA TODAY

Foreshadowing possible criminal charges against banking giants Credit Suisse and BNP Paribas, Attorney General Eric Holder warned Monday, "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 video message on the Justice Department website. "That view is mistaken," he said. "No individual or company, no matter how large or how profitable, is above the law."

Holder did not identify the targets of the inquiries by name, but a Justice official -- who was not authorized to speak publicly about pending criminal investigations -- confirmed that prosecutors will announce criminal charges against the two banks probably in the coming weeks.

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. Representatives of the banks didn't comment.

Prosecutors and regulators are trying to resolve the criminal matters without creating havoc in the financial system. Holder said it would be "irresponsible not to consider" the possibility that a major case would have damaging results.

Columbia Law School Professor John Coffee said Holder's remarks could lead the banking industry to be more wary of wrongdoing. "Maybe they'll start saying it's not just the cost of doing business any more," he said.

Jacob Frenkel, a former Securities and Exchange Commission lawyer, said Holder's stance could have "a destructive effect rather than a deterrent effect." Some companies may choose to leave the USA if it is seen as becoming a "regulatory, unfriendly environment."

McCoy reported from New York

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Source: USA Today