AFP, Washington :
Handing out multibillion-dollar fines right and left to domestic and foreign financial giants, the United States has taken on the role of the unforgiving global cop of the business world.
In stark contrast to the relative inertia of white-collar law enforcement in Europe, Washington most recently brought the hammer down on Deutsche Bank and Credit Suisse, which sold junk-filled, mortgage-backed securities ahead of the 2008 financial meltdown.
Deutsche Bank has agreed to a payout of $7.2 billion, while Credit Suisse settled for $5.3 billion to resolve American authorities’ allegations and avoid the lengthy headache of a trial.
Instead of dragging financial firms to court, the US has taken them to the cashier.
American giants have not been spared: JP Morgan Chase, Citigroup, Morgan Stanley and Bank of America collectively have shelled out $40 billion to settle cases linked to toxic, crisis-era financial products.
“There’s a kind of fundamentalism to US law,” said Nicolas Veron, a senior fellow at the Brussels-based think tank Bruegel and the Washington-based Peterson Institute.
“If you break the law, punishment comes down.” To be sure, British authorities have taken action over the Libor interest rate manipulation scandal but such retribution remains rare in the rest of Europe.
“It isn’t so much a difference in the rules as in the manner in which they are applied. Things are much more severe in the United States,” Veron told AFP, adding that European countries “do not dare” punish their national flagship companies.
The American legal framework nevertheless offers the United States the means to extend the long arm of the law well beyond its borders.
In the most recent cases, the United States imposed $2.6 billion in criminal penalties on the Brazilian construction conglomerate Odebrecht-most of which will be paid to Brazil-and a half billion on the Israeli generic drugmaker Teva Pharmaceutical. Both matters involved corruption occurring outside the United States.
Handing out multibillion-dollar fines right and left to domestic and foreign financial giants, the United States has taken on the role of the unforgiving global cop of the business world.
In stark contrast to the relative inertia of white-collar law enforcement in Europe, Washington most recently brought the hammer down on Deutsche Bank and Credit Suisse, which sold junk-filled, mortgage-backed securities ahead of the 2008 financial meltdown.
Deutsche Bank has agreed to a payout of $7.2 billion, while Credit Suisse settled for $5.3 billion to resolve American authorities’ allegations and avoid the lengthy headache of a trial.
Instead of dragging financial firms to court, the US has taken them to the cashier.
American giants have not been spared: JP Morgan Chase, Citigroup, Morgan Stanley and Bank of America collectively have shelled out $40 billion to settle cases linked to toxic, crisis-era financial products.
“There’s a kind of fundamentalism to US law,” said Nicolas Veron, a senior fellow at the Brussels-based think tank Bruegel and the Washington-based Peterson Institute.
“If you break the law, punishment comes down.” To be sure, British authorities have taken action over the Libor interest rate manipulation scandal but such retribution remains rare in the rest of Europe.
“It isn’t so much a difference in the rules as in the manner in which they are applied. Things are much more severe in the United States,” Veron told AFP, adding that European countries “do not dare” punish their national flagship companies.
The American legal framework nevertheless offers the United States the means to extend the long arm of the law well beyond its borders.
In the most recent cases, the United States imposed $2.6 billion in criminal penalties on the Brazilian construction conglomerate Odebrecht-most of which will be paid to Brazil-and a half billion on the Israeli generic drugmaker Teva Pharmaceutical. Both matters involved corruption occurring outside the United States.
