An outspoken freshman U.S. senator with a record of taking on Wall Street wants financial regulators and federal prosecutors to provide an economic justification for allowing big banks to settle investigations without admitting any wrongdoing. In a May 14 letter to the heads of the Federal Reserve, the Securities and Exchange Commission and the Justice Department, Massachusetts Democratic Senator Elizabeth Warren asks the agencies to provide her with details of how they weigh the costs and benefits of settling versus trying cases. “If a regulator reveals itself to be unwilling to take large financial institutions all the way to trial – either because it is too timid or because it lacks resources – the regulator has a lot less leverage in settlement negotiations and will be forced to settle on terms that are much more favorable to the wrongdoer,” Warren wrote. More in The Insurance Journal here.
