“Let’s have trials instead, and if a bank really is a criminal enterprise, break it up. And if not, regulators shouldn’t browbeat managers to admit firm-wide guilt for actions they may have known nothing about…

…Progressives like Elizabeth Warren are happy to see settlements in which companies bow before Washington and, for their corporate sins, pay shareholder money in tribute to the feds. We prefer trials that allow our judicial system to determine which if any individuals broke the law and can be held accountable. Sen. Warren also criticizes the SEC’s practice of granting waivers to firms admitting guilt from restrictions that would otherwise bar them from enjoying certain privileges in the securities markets. She quotes her pal (SEC Commissioner) Stein, who said recently that granting such waivers to banks “effectively rendered criminal convictions of financial institutions largely symbolic.” Of course they did, which is the point of the political exercise. While Ms. Stein frequently opposes waivers that save banks money, she’s much less inclined to deny a waiver when the viability of the firm would be thrown into question. In other words, she wants kudos from the Warren crowd for bashing a bank, without the accountability that would come from destroying one.”, The Wall Street Journal Editorial Board

President Warren Declares

She’s not running for the White House but acts like she’s already there.

Senator Elizabeth Warren

Senator Elizabeth Warren Photo: Andrew Harrer/Bloomberg News

This week the lefty outfits MoveOn.org and Democracy for America announced that they’ve given up trying to persuade Senator Elizabeth Warren to run for President in 2016. Maybe it’s because she doesn’t want to wait that long.

Across the landscape of economic policy, the Massachusetts Democrat is bidding for control of the Obama agenda over the final 19 months of the President’s term. The latest salvo from the Warren ’15 campaign came Tuesday when the Senator lunged for control over the appointments process at the Securities and Exchange Commission.

Ms. Warren was ostensibly sending a letter to SEC Chair Mary Jo White to air various complaints about the latter’s management of the agency. But the 13-page screed, accusing the former prosecutor of broken promises and weak leadership among other alleged offenses, reads like a direct-mail piece from a political fundraising operation. We’d expect kinder words in a Harry Reid letter to Ted Cruz. Adding to the bizarre nature of Tuesday’s campaign literature, we’re told that when Sen. Warren and Chair White have met privately, discussion has been cordial.

Notice the timing. Democratic SEC Commissioner Luis Aguilar is headed out the door and his successor hasn’t been appointed. Ms. Warren is looking to pair another progressive with her Mini-Me, Kara Stein, who joined the commission in 2013.

But the White House has lately been considering Keir Gumbs, a respected former SEC attorney now a partner at the Covington & Burling law firm. Most Journal readers would likely consider him a Beltway liberal, but apparently not enough of one for Ms. Warren. We suspect Tuesday’s letter is a message as much to the White House as to Chair White that President Warren intends to maintain her appointment power.

Recall that after it was clear in 2010 that the Senate would not confirm her to run the new Consumer Financial Protection Bureau, she persuaded Mr. Obama to let her run it anyway as a special adviser. She then spent a year hiring key personnel who have proceeded to harass business with Warren-like fervor. The House that Liz Built has lately been working to extract auto-loan settlements from banks for minority borrowers who may not even exist.

Speaking of banker-bashing, Sen. Warren helps run the Treasury, too. In January she forced the White House to abandon its effort to hire Lazard veteran Antonio Weiss as undersecretary for domestic finance. Mr. Weiss settled for a job as an adviser.

And now Madame President aims to manage the SEC. The laundry list of complaints she mailed over on Tuesday has little to do with protecting taxpayers from future bailouts or ensuring that the capital markets support growth and job creation. She demanded more disclosures related to CEO pay and new disclosure rules for political spending.

Among her more preposterous charges is Chair White’s alleged “Failure to Require Admissions of Wrongdoing in SEC Enforcement Cases.” Sen. Warren complains that over a roughly 15-month period ending last September, companies only admitted violations of specific securities laws in eight settlements with the SEC, plus another 11 cases in which there was a “broad admission of facts specified by the SEC.”

But before Ms. White arrived at the SEC in April 2013 the number of such admissions was roughly zero. It was not SEC policy to demand such admissions as a condition of settlement. That’s why they call them settlements. If companies have to admit wrongdoing and leave themselves open to related private litigation, many will choose not to settle, which by the way would be fine with us.

Progressives like Elizabeth Warren are happy to see settlements in which companies bow before Washington and, for their corporate sins, pay shareholder money in tribute to the feds. We prefer trials that allow our judicial system to determine which if any individuals broke the law and can be held accountable.

***

Sen. Warren also criticizes the SEC’s practice of granting waivers to firms admitting guilt from restrictions that would otherwise bar them from enjoying certain privileges in the securities markets. She quotes her pal Ms. Stein, who said recently that granting such waivers to banks “effectively rendered criminal convictions of financial institutions largely symbolic.”

Of course they did, which is the point of the political exercise. While Ms. Stein frequently opposes waivers that save banks money, she’s much less inclined to deny a waiver when the viability of the firm would be thrown into question. In other words, she wants kudos from the Warren crowd for bashing a bank, without the accountability that would come from destroying one.

Let’s have trials instead, and if a bank really is a criminal enterprise, break it up. And if not, regulators shouldn’t browbeat managers to admit firm-wide guilt for actions they may have known nothing about.

And speaking of a return to accountability, if Ms. Warren wants the authority to hire SEC commissioners, she should first have to win a presidential election.

Posted on June 4, 2015, in Postings. Bookmark the permalink. Leave a comment.

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