Sen. Elizabeth Warren (D-Mass.) had harsh criticism for U.S. regulators… (Cliff Owen / Associated…)
Sen. Elizabeth Warren (D-Mass.) wants to know: How much money do banks have to launder to get charged with a crime?
In a Senate Banking Committee hearing Thursday, Warren asked financial regulators why officials from banks weren't prosecuted even after confessing to extensive money laundering.
Specifically, she asked why British bank HSBC -- which was fined $1.92 billion after admitting to moving millions of dollars around for drug cartels, terrorist organizations and regimes such as Iran -- avoided prosecution.
HSBC "did it over and over and over again across a period of years," Warren said. "And they were caught, doing it, warned not to do it and kept right on doing it and evidently making profits doing it."
"How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?" she continued.
Warren's questions come just a few days after Atty. Gen. Eric H. Holder Jr. suggested some banks were too connected to the wider economy to prosecute, especially when regulators "are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy."
But Warren, who made a name for herself as a consumer protection advocate and Harvard law professor, said that kind of thinking was "fundamentally wrong" and compared the punishment of small-time drug dealers to large-scale financial fraud.
"If you're caught with an ounce of cocaine, chances are good you're going to jail. If it happens repeatedly, you may go to jail for the rest of your life," Warren said. "But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed."
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