Happy Halloween friend, 

While we hope you are enjoying the festivities today, we also know that real-life horror stories continue to haunt millions of hardworking Americans. While much of the finance industry properly serves the needs of America, there is still just an unbelievable amount of predatory misconduct and lawbreaking as detailed in our recent Wall Street Rap Sheet report. Just since May 2022, Wall Street has paid $9 billion in fines in more than 60 cases. That’s on top of the $198 billion in fines/settlements in 430 cases over the last 23 years. Grand total: the six Wall Street megabanks have paid more than $207 billion in fines and settlements in 490 legal actions!

There are real people being grievously hurt behind these big numbers. Wells Fargo for example, was fined $3.7 billion to resolve allegations that the company wrongfully foreclosed on homes and illegally repossessed vehicles, incorrectly assessed fees and interest, repeatedly misapplied loan payments, and charged surprise overdraft fees. This impacted a stunning 16 million customers.

These numbers show—again—that fines, no matter how big and frequent, just aren’t effective in getting banks to follow the law and that lawbreaking has become “business as usual.” They routinely break the law, get sweetheart settlements, pay fines that are less than the cost-of-doing-business, and move on to commit even more violations of law. Adding insult to injury, the responsible individuals at the banks almost always walk away unpunished, their pockets stuffed with bonus money.

Another stark example of financial industry lawbreaking is crypto, with former FTX CEO Sam Bankman-Fried’s ongoing criminal trial highlighting so much of the industry’s predatory and criminal behavior. Given our aggressive fight against FTX and SBF in 2022 long before the collapse, we’re obviously closely following the trial and SBF’s testimony. Check out our prior work here and the new Bloomberg documentary on FTX’s rise and fall.

At least in the FTX case, the executives are being personally prosecuted. That simply should not be a rare event. The only way to stop the Wall Street crime spree and the repeat offenders throughout finance is to go after individual executives, supervisors and board members at financial institutions, both civilly and criminally.  Until the senior financiers are held personally and meaningfully accountable, lawbreaking will not be punished or deterred. That’s the only way to end the ongoing nightmare and start putting the concerns of Main Street before Wall Street.

Best,
Dennis

Dennis Kelleher
Co-Founder, President & CEO, Better Markets

The Fed, FDIC, and OCC released final rules to reform the Community Reinvestment Act. They are well-intentioned but ultimately are not likely to work, and will continue to miss classic cases of redlining. Our policy brief  explains that and what the regulators could have and should have done to fix that.

Anyone who relies on a financial product or service—a checking account, credit card, mortgage, student loan, car loan, retirement plan, college savings fund, or brokerage account—has a stake in the Supreme Court’s decisions. We outline the cases we’re watching this term in our new report.

The Fifth Circuit Court of Appeals upheld the SEC’s approval of the Nasdaq’s Board Diversity Rule. Hopefully, this rule will lead to greater diversity in America’s corporate board rooms, which should better reflect the diversity of the country, and spark progress in bringing minorities into the economic mainstream and centers of corporate power.

The recent reported funding of Hamas through crypto confirms yet again that crypto’s principal if not only role is to facilitate criminal activities and other atrocities across the globe. To deflect and deny this reality, the cryptocurrency industry continues to insist that cryptocurrencies are not effective tools for illicit activities because the blockchains on which transactions are recorded are supposedly public and transparent. Our fact sheet explains why those claims are false and why the industry is wrong.

Bank capital is critical. However, maximizing Wall Street’s bonuses depends on minimizing capital and that’s why Wall Street fights to prevent regulators from requiring them to have enough capital.

- Dennis Kelleher for The American Prospect

October 3
ESG has lost its meaning. One advocate says let’s throw it in the trash

October 3
Supreme Court case may gut the CFPB: Consumer watchdog’s ‘future is on the line,’ group says

October 13
New US SEC rules to shine a light on short selling

October 24
Big Banks Face Fresh Anti-Redlining Rules From Top US Regulators

Each month our legal team outlines some of the top cases we're keeping an eye on, the Amicus "Friend of the Court" Briefs we have filed, and why everyone with a bank account, credit card, mortgage loan, or retirement loan should be interested in those cases.  

The bipartisan deal Congress passed to keep the government open at the end of September ended up throwing the House of Representatives into chaos for most of the month as Speaker McCarthy was ousted and the House majority worked to find a replacement.

Last week, Dennis Kelleher appeared in a Bloomberg documentary about the rise and fall of FTX and Sam Bankman-Fried. In the below clip, Dennis explains how Better Markets stood up to FTX and rejected a bribe to support its goals.

SEC disclosure changes press activists to reveal big stakes faster
Financial Times, October 10, 2023

‘Oof’: Sam Bankman-Fried’s Trial Reveals Inside Details of How FTX Died
The New York Times, October 20, 2023

The power to walk away: CFPB moves to give consumers control over financial data
Bloomberg, October 19, 2023

How High Interest Rates Sting Bakers, Farmers and Consumers
The New York Times, October 23, 2023