Should banks be able to constantly pay their way out of trouble?

[Confounding]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

 

[bripat9643]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

NO, I never heard that. Normally they are required to repay all the money and pay a fine on top of that.

 

[FA_Q2]

Why do banks only pay a fine? What do you want them to do? A bank is a business entity - it exists as a mental construct not an actual being. You cant 'punish' a bank, or any business for that matter. It cannot go to jail. It cannot be slapped upside the head.

What you CAN do is make i't unprofitable to break the rules. Hence fines. Companies do not do anything that is unprofitable.

Now, those that are inside the company - they DO go to jail when they do something that is illegal and they can be prosecuted for it. That is not normally headline material and no one ever knows when someone is jailed for the most part.

 

[WheelieAddict]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

Prepare for more:

As Congress approves Dodd-Frank repeal, consumer advocates fire back

 

[Toddsterpatriot]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

Prepare for more:

As Congress approves Dodd-Frank repeal, consumer advocates fire back

Finally, Dodd-Frank was an expensive piece of crap.

 

[MaryL]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

Oh please, Wells Fargo? Well hells bells, like say catholic church used to sell indulgences to all those poor poor rich people. Our governmin't is the very definition of "sketchy". How do you think we got sanctuary cities, or allowed the housing crisis, or even school shootings and the NRA?

 

[Confounding]

Why do banks only pay a fine? What do you want them to do?

I'd be okay with severe financial penalties for banks that are repeat offenders. Oh, that 40 million dollar fine doesn't scare you? Maybe a 40 billion dollar fine is in order.

 

[WheelieAddict]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

Prepare for more:

As Congress approves Dodd-Frank repeal, consumer advocates fire back

Finally, Dodd-Frank was an expensive piece of crap.

Nice. No more govt. bailouts next time then.

 

[Andylusion]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

So first let me ask you.... if you get caught speeding, should you be allowed to pay your way out of it? Or should you be tossed in jail, or have your car confiscated, or what?

Because truthfully no one has ever been killed because of the lost money.

People die from bad drivers on a routine basis. People driving too fast, kill people all the time. So every speeding ticket should result in prison time, right?

Surely you are more interested in penalizing people for violations that cause death, than violations that don't.

Of course there is a difference.... in that people routinely accidentally go over the speed limit, for a number of reasons. Some just thinking about other things, and accidentally start moving too fast. Others simply don't notice the speed limit sign and don't realize the speed limit has changed.

Similarly, banks do the same thing all the time. They often break rules, they don't even know exist. I wish I had saved a picture.... years ago the SEC used to sell all the banking laws, in literal books. The last time I looked it up, it cost $1,000 to order the complete set, of over 14 books, that were 500 pages each, filled with the endless rules and regulations governing banking.

I read once that every single driver on the road today, breaks a motor vehicle rule on a daily or weekly basis. There are simply so many laws, you can't help but break one all the time.

How then can a bank, with millions of laws, avoid breaking a law?

I remember reading an interview with a member of the SEC, that said that if the SEC were to rigidly enforce all the banking laws, there wouldn't be a bank left open in the US.

So, in a nutshell, that is the fundamental reason that banks can just pain heavy fines.

Usually, the only time they send people to prison, is when they can prove direct attempts to mislead or falsify information given to the SEC.

There are some other reasons. Some 'rules' implemented by the SEC, are vague, and are subject to interpretation, both by the banks, and by the SEC.

If you go read just the titles of SEC public statements, it's an endless list of rule changes. There were 10 rule changes in April, and 12 in March.

When rules can be changed so often, how can a bank possibly perfectly follow the rules? Even when you get one rule down, the next month the interpret it differently, and now you are violating it.

See the problems? This is why banks just pay fines constantly.

By the way, this is why some fines are not very large, and others are huge.

The SEC is charging fines constantly, and criminal suits ALL THE TIME.

If you go look at the SEC site right now, I counted 8 different charges filed, in just May ALONE. Just May, and May isn't even over yet.

Sometimes the fines seem small, because they charged them fines for a dozen different things, before they got to the one that you hear about.

SO..... there are tons of reasons.

 

[Andylusion]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

Prepare for more:

As Congress approves Dodd-Frank repeal, consumer advocates fire back

Finally, Dodd-Frank was an expensive piece of crap.

Nice. No more govt. bailouts next time then.

I'm all for that. Conservatives were against bailouts from the very start. In fact, the Conservative caucus in the House, proposed an alternative plan, that specifically would not bail out the banks. The left-wingers and unfortunately Bush, both shot it down.

Left-wingers to this day, claim the bailouts "saved the country". No they didn't. Not even close.

 

[Andylusion]

Why do banks only pay a fine? What do you want them to do?

I'd be okay with severe financial penalties for banks that are repeat offenders. Oh, that 40 million dollar fine doesn't scare you? Maybe a 40 billion dollar fine is in order.

That still won't scare them.

You need to put yourself in the place of the people running the company. Taking a risk doesn't harm them, because the government bailed out the banks.

You could level a $40 Trillion dollar fine on them. They would simply close, and join a different bank. The fine wouldn't be paid, and everyone would be working elsewhere.

The solution to the problem, is simple deregulation, and profit-and-loss capitalism.

How do I mean? When the banks fail.... just let them fail.

Iceland did this. All the major banks went entirely broke. The government planned to bail them out.... realized they couldn't..... and didn't. They simply failed.

When the banks failed, new banks replaced them, or they went through bankruptcy. The economy recovered, and fast. By 2010, Iceland was on the up swing, and we were still crashing.

Just let the free-market work. When the banks crash.... let them crash.

 

[Confounding]

So first let me ask you.... if you get caught speeding, should you be allowed to pay your way out of it? Or should you be tossed in jail, or have your car confiscated, or what?

I think speeding tickets should depend on your level of income. A millionaire is not worried about a $400 speeding ticket. However a $250,000 speeding ticket might make the fucker think twice. Maybe the bank fines need to go waaaaaay up.

How then can a bank, with millions of laws, avoid breaking a law?

Do you believe it's typically the case that banks only accidentally break the rules, or is it more likely that they usually know they're doing it and take a gamble with getting caught? What's the worst that could happen? A fine that doesn't hurt, that's what.

So, in a nutshell, that is the fundamental reason that banks can just pain heavy fines.

Usually, the only time they send people to prison, is when they can prove direct attempts to mislead or falsify information given to the SEC.

There are some other reasons. Some 'rules' implemented by the SEC, are vague, and are subject to interpretation, both by the banks, and by the SEC.

If you go read just the titles of SEC public statements, it's an endless list of rule changes. There were 10 rule changes in April, and 12 in March.

When rules can be changed so often, how can a bank possibly perfectly follow the rules? Even when you get one rule down, the next month the interpret it differently, and now you are violating it.

See the problems? This is why banks just pay fines constantly.

By the way, this is why some fines are not very large, and others are huge.

The SEC is charging fines constantly, and criminal suits ALL THE TIME.

If you go look at the SEC site right now, I counted 8 different charges filed, in just May ALONE. Just May, and May isn't even over yet.

Sometimes the fines seem small, because they charged them fines for a dozen different things, before they got to the one that you hear about.

SO..... there are tons of reasons.

A lot of what you say seems fairish, but I strongly disagree with your suggestion that banks typically just didn'r know. I also thing more severe fines should be imposed.

 

[WheelieAddict]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

Prepare for more:

As Congress approves Dodd-Frank repeal, consumer advocates fire back

Finally, Dodd-Frank was an expensive piece of crap.

Nice. No more govt. bailouts next time then.

I'm all for that. Conservatives were against bailouts from the very start. In fact, the Conservative caucus in the House, proposed an alternative plan, that specifically would not bail out the banks. The left-wingers and unfortunately Bush, both shot it down.

Left-wingers to this day, claim the bailouts "saved the country". No they didn't. Not even close.

We should just have another great depression next time.

 

[Andylusion]

So first let me ask you.... if you get caught speeding, should you be allowed to pay your way out of it? Or should you be tossed in jail, or have your car confiscated, or what?

I think speeding tickets should depend on your level of income. A millionaire is not worried about a $400 speeding ticket. However a $250,000 speeding ticket might make the fucker think twice. Maybe the bank fines need to go waaaaaay up.

How then can a bank, with millions of laws, avoid breaking a law?

Do you believe it's typically the case that banks only accidentally break the rules, or is it more likely that they usually know they're doing it and take a gamble with getting caught? What's the worst that could happen? A fine that doesn't hurt, that's what.

So, in a nutshell, that is the fundamental reason that banks can just pain heavy fines.

Usually, the only time they send people to prison, is when they can prove direct attempts to mislead or falsify information given to the SEC.

There are some other reasons. Some 'rules' implemented by the SEC, are vague, and are subject to interpretation, both by the banks, and by the SEC.

If you go read just the titles of SEC public statements, it's an endless list of rule changes. There were 10 rule changes in April, and 12 in March.

When rules can be changed so often, how can a bank possibly perfectly follow the rules? Even when you get one rule down, the next month the interpret it differently, and now you are violating it.

See the problems? This is why banks just pay fines constantly.

By the way, this is why some fines are not very large, and others are huge.

The SEC is charging fines constantly, and criminal suits ALL THE TIME.

If you go look at the SEC site right now, I counted 8 different charges filed, in just May ALONE. Just May, and May isn't even over yet.

Sometimes the fines seem small, because they charged them fines for a dozen different things, before they got to the one that you hear about.

SO..... there are tons of reasons.

A lot of what you say seems fairish, but I strongly disagree with your suggestion that banks typically just didn'r know. I also thing more severe fines should be imposed.

The severity of the crime doesn't change based on a your income. The idea that someone who is a doctor should be fined a $500 for a $50 offense, is not logical, or moral I would say.

Again, the SEC is very active at trying to figure out if the bank is intentionally trying to deceive them. In cases where people were caught actively trying to lie to the SEC, the penalties are very tough.

I would cite Enron, as an example. There was clear direct deception involved, and Jeff Skilling went to prison for 14 years.

Centra Tech Founders Charged for Fraud by SEC - DJ Khaled and Floyd Mayweather Involved | [blokt] - Blockchain, Bitcoin & Cryptocurrency News

Centra Tech founder is accused of Fraud. If guilty, it could be 20 years in prison.

So to be perfectly honest, I think most (possibly not all) but most are not intentional efforts to defraud the SEC and violate laws.

Do not under estimate the ability of the federal government to investigate criminal actions. Generally speaking, if someone is intentionally doing something wrong, they will be found out. The SEC has more than enough investigators to find out if the banks are doing stuff on purpose. They certainly have no problem finding out if other people are doing stuff intentionally.

As for the fines.....

Again, you can't just have arbitrary punishment for crime, based on how much money the target has.

One of the reasons the US exists, is because of arbitrary punishment in England, where people were given different punishments based on who they were.

We don't do that here. We have equality under the law. That means that if you park in a no parking zone, you are charged $55, and if you fly down the road at 25 mph over the limit, you are charged $150.

It doesn't mean that if I fly down the road at 25 mph over the limit, I'm charged $50, because I only make $10/hour, and if you park in a no parking zone, you are charged $150 because you make more money.

That's not how our system works. The SEC can't charge a small bank several million for a violation, and then charge say... Citigroup several billion for the exact same violation. That's going to end up with a huge Supreme Court lawsuit, and end up having Citigroup off the hook completely, because the SEC is violating equality under the law.

Now as for exactly how much the fines should be.... I don't know. That kind of thing is way above my pay-grade. But I do know that you can't just charge someone a bigger amount of money, simply because they are a bigger target.

The fine has to fit what they did.

 

[Andylusion]

Ever heard one of those stories where a bank did something sketchy to make money, got busted and then got fined an amount lower than the amount of money they ripped off in the first place? Banks do this shit all the time. They use obviously corrupt means to secure large amounts of money and then get slapped on the wrist. There is no real incentive for them to stop. Should this be allowed? What's the alternative?

Prepare for more:

As Congress approves Dodd-Frank repeal, consumer advocates fire back

Finally, Dodd-Frank was an expensive piece of crap.

Nice. No more govt. bailouts next time then.

I'm all for that. Conservatives were against bailouts from the very start. In fact, the Conservative caucus in the House, proposed an alternative plan, that specifically would not bail out the banks. The left-wingers and unfortunately Bush, both shot it down.

Left-wingers to this day, claim the bailouts "saved the country". No they didn't. Not even close.

We should just have another great depression next time.

Case and point right here. Someone operating under the myth that bank bailouts, saved the economy.

This is exactly why corporate welfare exists, is because of people operating under this ideology.

 

[WheelieAddict]

Prepare for more:

As Congress approves Dodd-Frank repeal, consumer advocates fire back

Finally, Dodd-Frank was an expensive piece of crap.

Nice. No more govt. bailouts next time then.

I'm all for that. Conservatives were against bailouts from the very start. In fact, the Conservative caucus in the House, proposed an alternative plan, that specifically would not bail out the banks. The left-wingers and unfortunately Bush, both shot it down.

Left-wingers to this day, claim the bailouts "saved the country". No they didn't. Not even close.

We should just have another great depression next time.

Case and point right here. Someone operating under the myth that bank bailouts, saved the economy.

This is exactly why corporate welfare exists, is because of people operating under this ideology.

We should just have a great depression next time.

 

[Andylusion]

Finally, Dodd-Frank was an expensive piece of crap.

Nice. No more govt. bailouts next time then.

I'm all for that. Conservatives were against bailouts from the very start. In fact, the Conservative caucus in the House, proposed an alternative plan, that specifically would not bail out the banks. The left-wingers and unfortunately Bush, both shot it down.

Left-wingers to this day, claim the bailouts "saved the country". No they didn't. Not even close.

We should just have another great depression next time.

Case and point right here. Someone operating under the myth that bank bailouts, saved the economy.

This is exactly why corporate welfare exists, is because of people operating under this ideology.

We should just have a great depression next time.

Case and point right here. Someone operating under the myth that bank bailouts, saved the economy.

This is exactly why corporate welfare exists, is because of people operating under this ideology.

 

[WheelieAddict]

Nice. No more govt. bailouts next time then.

I'm all for that. Conservatives were against bailouts from the very start. In fact, the Conservative caucus in the House, proposed an alternative plan, that specifically would not bail out the banks. The left-wingers and unfortunately Bush, both shot it down.

Left-wingers to this day, claim the bailouts "saved the country". No they didn't. Not even close.

We should just have another great depression next time.

Case and point right here. Someone operating under the myth that bank bailouts, saved the economy.

This is exactly why corporate welfare exists, is because of people operating under this ideology.

We should just have a great depression next time.

Case and point right here. Someone operating under the myth that bank bailouts, saved the economy.

This is exactly why corporate welfare exists, is because of people operating under this ideology.

Without the bank bailouts what would have happened with the economy?

 

[Andylusion]

I'm all for that. Conservatives were against bailouts from the very start. In fact, the Conservative caucus in the House, proposed an alternative plan, that specifically would not bail out the banks. The left-wingers and unfortunately Bush, both shot it down.

Left-wingers to this day, claim the bailouts "saved the country". No they didn't. Not even close.

We should just have another great depression next time.

Case and point right here. Someone operating under the myth that bank bailouts, saved the economy.

This is exactly why corporate welfare exists, is because of people operating under this ideology.

We should just have a great depression next time.

Case and point right here. Someone operating under the myth that bank bailouts, saved the economy.

This is exactly why corporate welfare exists, is because of people operating under this ideology.

Without the bank bailouts what would have happened with the economy?

It would have recovered, just like it did in Iceland, and Estonia, and likely would have recovered faster.

Why?

Because part of the reason the asset market was constantly stuck in a state of flux, was because no one knew exactly what the government under Obama would do.

Banks with "troubled asset" refused to sell off those assets, believe they might get a bailout.

Say you have a car that you want to sell, that has a broken motor. Do you sell the car for whatever you can, and move on with your life? Or do you hold onto it, hoping that someone will pay you full price for a junker?

No one in a free-market is going to hold onto junk, hoping that someone will eventually think "Yeah I'll pay you full price for that garbage there".

Yet that is exactly what all the banks did, and no one could figure out why. Well the answer is obvious. Because Obama was pushing his crappy bailouts, that as part of the deal, was the Federal Reserve paying top dollar for toxic assets. Why would you sell garbage at a loss... if you have some brainless fool in the government, spending tax payer money to buy that garbage at retail prices?

Yeah, the economy would have recovered just fine without any bailout, and likely even better.

 

[Confounding]

The severity of the crime doesn't change based on a your income. The idea that someone who is a doctor should be fined a $500 for a $50 offense, is not logical, or moral I would say.

Fines are meant to be a deterrent. A $400 ticket means nothing to a rich person, but it could turn a poor person's life upside down for a while. Why should rich people not have to fear fines for misbehavior?

So to be perfectly honest, I think most (possibly not all) but most are not intentional efforts to defraud the SEC and violate laws.

With all the money and lawyers banks have I find that hard to believe.

Again, you can't just have arbitrary punishment for crime, based on how much money the target has.

Fines needs to actually be deterrents to people that break laws.

That's not how our system works.

It could, at least when it comes to the banks, and I think that'd be just fine. I see what you're saying; I just disagree with a lot of it.