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#Anti Money Laundering

Guilty pleas: still too big to jail?

International Compliance Association

BNP Paribas , Credit Suisse , Financial Sanctions

Recent reports suggest that BNP Paribas may be facing fines potentially in excess of US $5bn for sanctions violations and, moreover, that the bank is being pressed to plead guilty to criminal charges as part of any resolution.

There are many eye-catching aspects of the case:

  • the expected size of the fine would far outstrip that handed out two years ago to HSBC (US $1.9bn) for similar violations
  • the severity of the penalties has reportedly been strongly influenced by a lack of co-operation on the part of the bank 
  • the case has further fuelled the debate around enforcement actions and penalties for non-US banks versus US authorities’ approach to US banks. Moreover, developments have taken on an increasingly political dimension following the announcement by the Governor of the Bank of France, Christian Noyer, that the French central bank’s review into BNP Paribas had found no breaches of EU or French regultions

Of further interest, however, is the fact that US prosecutors are seeking a guilty plea, following a similar plea extracted recently from Credit Suisse.

Some contend that a guilty plea should entail the revocation of a bank’s license; effectively a “death penalty” for the institution. In the recent Credit Suisse case, however, no license was revoked and no individuals convicted, and it seems likely, therefore, that a similar approach might be taken in the BNP Paribas case.

What, then, is the purpose of this new trend in approach by US prosecutors? Is it simply, as some have suggested, “guilty-lite”?Is it anything more than a symbolic gesture, designed to add some substance to the recent assertions of the US Attorney General that no institutions are “too big to jail”, but in practice little more than window dressing?

Or, on the flip side, is a guilty plea likely to bring with it genuine loss of business through ongoing reputational damage?

Perhaps only time will tell, but, as ever, your thoughts are appreciated.


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