Two U.S. Senators Press Justice Department on Bank Prosecutions

Two U.S. senators on Tuesday questioned whether the Justice Department has been aggressive enough in prosecuting misconduct at the largest banks and asked the department to turn over information on how it determines punishments.

Sherrod Brown, a Democrat who chairs a Senate Banking subcommittee, and Chuck Grassley, the top Republican on the Senate Judiciary Committee, said they are worried that certain Wall Street banks enjoy "too big to fail" status in enforcement policy, resulting in disproportionately low penalties.

The requests come amid renewed interest in whether U.S. authorities have held accountable the institutions and individuals who contributed to the 2007-2009 financial crisis.

In a letter to Attorney General Eric Holder, the senators asked whether the Justice Department ever failed to prosecute any institutions due to concern about the stability of the financial markets or imposed a penalty that reflected such concerns.

They asked Holder to name outside experts that prosecutors consulted in making decisions about charging financial institutions with more than $1 billion in assets. Brown and Grassley also asked for copies of any contracts with such experts.

Justice Department officials have said they are required to consider collateral consequences when deciding whether to charge a company.

"Our markets will only function efficiently if participants believe that all laws will be enforced consistently, and that violators will be punished to the fullest extent of the law," the two senators wrote. "There should not be one set of rules that apply to Wall Street and another set for the rest of us."

The Justice Department has entered into several major settlements related to financial misconduct in recent months.

London-based bank HSBC agreed in December to pay $1.9 billion to resolve charges that it failed to maintain an effective anti-money laundering program. In exchange for improving its compliance program, the department agreed to defer and eventually drop criminal charges.

Last month, Swiss bank UBS agreed to pay some $1.5 billion and its Japan unit pleaded guilty to a criminal charge in connection with its role in manipulating benchmark interest rates.

"We have received the letter and are reviewing it," Justice Department spokeswoman Rebekah Carmichael said.