Announcing The Ponzi Scheme Blog’s JANUARY POLL

Posted by Kathy Bazoian Phelps

 

Cast your vote in this month’s poll. This one relates to how the government should assess fines against financial institutions that have participated in, failed to report suspicious activity in, or taken other action to assist in perpetuating a Ponzi scheme.
 

Specifically, the question is:
 

How should the dollar amount of fines for a bank's participation in a Ponzi scheme be determined?
 

For background purposes, let me recap the two largest such fines in the past few months levied in two of the more notorious Ponzi schemes:

• JPMorgan tentatively agreed to pay $2 billion for involvement in Bernard Madoff scheme (total customer losses in Madoff are about $19.5 billion) 
• TD Bank was assessed fines of $52.5 million for involvement in Scott Rothstein scheme (total victim losses in Rothstein are at least $500 million in the $1.4 billion scheme)

To get a flavor for the number of fines and the dollar amount of those fines assessed against financial institutions in all kinds of cases, see FinCEN’s report of fines in enforcement actions in all cases at http://www.fincen.gov/news_room/ea/, or the Office of the Controller of Currency website summarizing enforcement actions and fine amounts at http://apps.occ.gov/EnforcementActions/.

Here are the choices in the JANUARY POLL, but please feel free to post comments or email me any other ideas you have on how to calculate the dollar amount of the fines being assessed. Should those fines be:

 

     a. A percentage of the bank's profits from the scheme?

     b. A percentage of the bank’s annual net profits?

     c. An amount sufficient to pay all victim losses?

     d. Other?