Others say

Is that all?

Pittsburgh Post-Gazette

Last week, the Department of Justice announced a $7 billion settlement with Citigroup, the nation's third-largest bank, over a federal investigation into the bank's handling of mortgage-backed securities. But don't applaud.

Last year, JPMorgan Chase agreed to pay $13 billion for its role in selling bad mortgage-backed securities--though more than half of that penalty was tax-deductible. The Justice Department is also seeking a $20 billion settlement against Bank of America for its role in troubled mortgage investments.

While those settlement numbers are eye-popping, they pale in comparison to the damage wreaked from dumping toxic mortgages on a U.S. economy that has yet to recover from the subprime-accelerated crisis. Despite the large settlement, Citigroup still managed a $181- million profit in the second quarter.

Attorney General Eric Holder hailed the settlement as a "landmark civil resolution" at a press conference. Yet in his own words, the bank "misrepresented the facts, including the level of risk," "sold defective loans to countless investors, including federally financed financial institutions" and "made false statements to investors." Misconduct this widespread, systematic and destructive should exact a penalty more severe than five weeks of revenue.

For all the actions at all the banks that were criminally negligent if not outright fraudulent in the mortgage-backed securities meltdown, not a single senior banker has gone to jail.

That also applies to bigger matters. HSBC in London laundered $800 million for Mexican drug cartels, helped Iran skirt U.S. sanctions and funneled funds to a blackballed, terrorist-linked bank. Not one HSBC banker went to jail.

Despite its cheers of "historic" and "landmark" penalties, the Justice Department hasn't meted out much justice at all.

Editorial on 07/23/2014

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