According to Better Markets, the six largest institutions have had to pay nearly $200 billion in fines and penalties over the past two decades.

Over $195 billion. This is the staggering amount that the six largest US banks have had to pay for all of their fines and penalties over the past twenty years. Bank of America, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley and Wells Fargo have been pilloried by the American association Better Markets, which has scrutinized all their crimes committed over the past two decades. A less than rosy portrait, which primarily features acts of money laundering, corruption, massive fraud in the sale of mortgage-backed securities, breaches of fiduciary duty or even market manipulation.

Targeted by 86 major legal actions, Bank of America is at the top of the ranking. The establishment headed by Brian Moynihan had to pay no less than 91 billion dollars over the period to settle them. Of this amount, 82.5 billion are to be credited to litigation related to the subprime crisis (including the record penalty of 16.65 billion imposed by the American courts in 2014). In second place is JPMorgan, with 80 procedures having generated more than 40 billion dollars in penalties and fines. Finally, Citigroup closes the podium with a total of 79 cases, for a bill of 20.5 billion dollars.

Complaints on the rise

The 2008 earthquake was one of the main vectors of proceedings against these establishments. But by excluding contentious cases related to subprime mortgages, the study is alarmed by an increase in complaints. Prior to the crisis, 85 lawsuits had been filed against its six major banks, for penalties of more than $14.3 billion. After 2008, and excluding business related to subprime mortgages, Better Markets identified 202 stocks for a total cost of 26.7 billion. “It is clear that all these fines and penalties have been clearly insufficient. They were not enough to punish these banks for their previous illegal behavior or to dissuade them, underlines the association. It seems these fines are just a cost of doing business, a speed bump on the road to ever bigger bonuses.” Some of the cases that occurred in 2020 would thus testify to a repetition of past mistakes. A worrying finding that leads the author of the study to note the insufficiency of the American legislative arsenal on this type of crime. At JPMorgan, the number of legal actions rose from 15 before the crisis, to 48 after (again excluding cases related to subprime mortgages). Same trend at Citigroup, where the contentious cases went from 16 to 48.

Finally, Goldman Sachs is not left out. This year, the firm agreed to pay $2.5 billion in an out-of-court settlement with Malaysia to end the 1Malaysia Development Berhad (1MDB) corruption case. Sum to which is added a penalty of 2.9 billion decided by the American Department of Justice. She had been accused by the country of having helped embezzle billions of dollars from the sovereign wealth fund 1MDB, by receiving commissions on bond issues. A case that brought down the party of former Prime Minister Najib Razak in its race for the 2018 Malaysian legislative elections. In addition, the former leader had been sentenced to twelve years in prison during his first trial. To make amends, Goldman Sachs had decided to reduce the remuneration of its directors.