Socialism and the End of the American Dream

After agreeing to pay a whopping $3.9 billion in fines and restitution, Goldman Sachs has finally been freed from one of its biggest albatrosses for its international business: Malaysian prosecutors have dropped all criminal charges in the 1MDB episode.

Reuters reports that, on Friday morning local time, Malaysian prosecutors announced that they would be withdrawing criminal charges against three Goldman Sachs units accused of misleading investors over a series of bond sales worth a combined $6.5 billion which helped fund the ill-fated sovereign wealth fund 1MDB (it stands for 1Malaysia Development Berhad). The Goldman subsidiaries based in London, Hong Kong and Singapore had pleaded not guilty to criminal charges back in February and the bank has consistently denied wrongdoing, though gallons of ink have been spilled about the alleged skulduggery that reportedly involved officials as senior as CEO Lloyd Blankfein. Now, the bank needs to settle things with the DoJ, which is also pursuing a criminal investigation. The DoJ estimates that $4.5 billion was siphoned from the fund by a group of insiders led by the fugitive financier Jho Low, the alleged mastermind, and former PM Najib Razak, who received hundreds of millions of dollars in proceeds from the fraud. Late last year, the bank was reportedly on the verge of a settlement with US authorities for roughly $2 billion, but those talks have reportedly fallen apart.

Prominent U.S. senators Bernie Sanders and Elizabeth Warren have joined watchdog groups and banking regulators in calling for a crackdown on dirty money and banks that profit from it in the wake of the FinCEN Files investigation. Sanders and Warren, former candidates for the 2020 Democratic presidential nomination who both inspired strong support on the left, called for tougher consequences for banks and their executives who move money linked to crime and corruption.

Sanders’ messages came less than a day after the International Consortium of Investigative Journalists’ release of FinCEN Files, a global investigation revealing how leading banks allowed trillions of dollars in tainted money to flow freely through the financial system. Based on more than 2,100 secret reports filed by banks to the U.S. Department of Treasury and obtained by BuzzFeed News, the investigation included more than 400 journalists in 88 countries around the world. Warren also called for a crackdown on banks that are complicit in the spread of dirty money, highlighting policy proposals that would strengthen the ability of law enforcement to combat white collar crime. Warren called for the creation of a new unit in the U.S. Treasury Department to investigate financial crimes linked to the flow of dirty money. She also pushed for the passage of the Ending Too Big to Jail Act, a law she proposed in 2018 that would make it easier to hold Wall Street executives criminally accountable when the banks they lead engage in illegal activity.

Elizabeth Rosenberg, a former sanctions official for the U.S. Treasury Department, said the revelations exposed the national security threats posed by banks’ laxity. “The FinCEN Files illustrate the alarming truth that an enormous amount of illicit money is sloshing around our financial system, and that U.S. banks play host and facilitator to rogues and criminals that represent some of America’s most insidious national security threats,” Rosenberg told the Wall Street Journal. Rosenberg urged the passage of stronger transparency laws that crack down on the use of anonymous companies, which are often used for money laundering.

JPMorgan Chase is set to pay a record $920 million to resolve probes from three federal agencies over its role in the manipulation of global markets for metals and Treasurys.The figure was released Tuesday morning by the Commodity Futures Trading Commission in a statement from Commissioner Dan Berkovitz. Last week, news reports indicated that the New York-based bank was nearing a settlement of almost $1 billion.The penalty is a record for spoofing, which is when sophisticated traders flood markets with orders that they have no intention of actually executing. The practice was banned after the 2008 financial crisis and regulators have made it a priority to stamp out.Of the $920 million, $436.4 million is a criminal monetary penalty, $172 million is a “criminal disgorgement amount” and $311.7 million is for victim compensation, according to the Department of Justice.

JPMorgan Chase is set to pay a record $920 million to resolve probes from three federal agencies over its role in the manipulation of global markets for metals and Treasurys.The figure was released Tuesday morning by the Commodity Futures Trading Commission in a statement from Commissioner Dan Berkovitz. Last week, news reports indicated that the New York-based bank was nearing a settlement of almost $1 billion.The penalty is a record for spoofing, which is when sophisticated traders flood markets with orders that they have no intention of actually executing. The practice was banned after the 2008 financial crisis and regulators have made it a priority to stamp out.Of the $920 million, $436.4 million is a criminal monetary penalty, $172 million is a “criminal disgorgement amount” and $311.7 million is for victim compensation, according to the Department of Justice.

The bank, the biggest U.S. lender by assets, has entered into a deferred prosecution agreement with the DOJ that will expire in three years if the firm satisfies its obligations under the deal.