Banks... Victims or Pariahs?

Earlier this week, I was called by a seminar promoter about an upcoming conference on whistleblowing and the False Claims Act. The promoter said I wasn’t invited to speak because the event was mostly defense oriented. Incredibly, the caller still wanted me to shell out $2095 to hear a bunch of white collar lawyers and bankers whine about how terrible whistleblowers are. (In the interest of fairness, he did say there would be a separate, unstructured networking event for any whistleblower lawyers who attended.)


Last year, Jesse Eisinger, writing for Pro Publica, said he too had been invited to an industry bitch session. Called the Securities Enforcement Forum, he actually attended. In his words, “Last week, I visited an alternate universe. The real world sees a pandemic of bank misconduct, but to the white-collar defense lawyers of Washington, the banks are the victims as they bow beneath the weight of regulators' remarkably harsh punishments.”


Banks are certainly are crying the blues. Over $100 billion in fines and penalties paid since 2009. That is more than the GDP of many countries.


Should we feel sorry for them? Ask folks who lost their home because of a wrongful foreclosure or predatory loan. Ask any of those folks who lost jobs or found themselves suddenly underemployed because the economy collapsed.


The banks all cry that penalties and sanctions have become too tough. Yet not one senior bank official was prosecuted or spent a day in jail. While millions of Americans lost their homes and had to move in with family, the banking elite continued to receive their multi-million dollar salaries.


It isn’t just homeowners and wage earners that have suffered. We often represent business owners that never missed a payment yet had their loans called.


If the enforcement climate is truly as onerous as the banks claim, it is only because banks sold billions of dollars of toxic mortgage backed securities. They made predatory loans to struggling borrowers. They promised loan modifications yet delivered nothing. They helped taxpayers evade taxes in offshore accounts. They held the business community hostage by only renewing lines of credit if the business owners agreed to impossible fees and rate hikes. They laundered money for terrorists and organized crime. And they manipulated anything they could (FOREX, LIBOR, the derivatives market…)


Eisinger thought the bank’s howling was bad last year. It may get much worse. America has a new top cop and her name is Loretta Lynch, our new Attorney General. She says that bankers that misbehave can now expect more record fines and prison time too. There is nothing that puts fear into the hearts of bankers than the thought of orange jumpsuits and being unemployed.


Prosecutors and regulators sometimes do overreach. More often than not, however, it is the banks that have been overreaching. Unfortunately, the U.S. Chamber is too quick to assail the banks instead of coming to the aid of the business community, which is often the victim of banking excesses.


Once you get beyond the posturing, whining and political maneuvering, there are two real fears in the banking industry today. We briefly touched on the first.  The Justice Department now says that those responsible for bank fraud and misconduct should be individually punished. 

The top defense lawyers are largely former regulators. The revolving door is such that no one really worried about going to jail. Paying big fines, which are finally starting to become painful, is still just a cost of doing business.  The threat of going to prison is new, however (and not well received).


The other real fear is juries. Ordinary folks summoned to do their civic duty. Since 2007, however, every juror has either directly suffered or knows someone who has been mistreated by banks and Wall Street.


All the big lawyers in the world can’t control a 6 or 12 person jury. We have an historic opportunity where the playing field is more level than ever before. Businesses that take on banks, loan servicers and others in the financial industry can actually win. Yes, banks will still unleash a fury of legal motions and maneuvering but businesses that hold on and make it to a jury will find sympathetic ears.


We are a law firm that sues banks. Plaintiffs’ lawyers proudly representing the business community (whistleblowers too). Americans have suffered from Wall Street’s greed and excesses too long.


Most lender liability lawyers come from big firms. That means a decided pro bank bias and ridiculous fees. As a group of boutique law firms we can offer experience, understanding and reasonable fees. Often we can offer alternative fee arrangements including flat fees and contingent fees.


Need more information? Give us a call. For more information contact attorney Chris Katers at [hidden email]. The author of this post, attorney Brian Mahany can also be reached at [hidden email] or by telephone at (414) 704-6731 (direct).


MahanyLaw –and- Judge, Lang & Katers… We Sue Banks