In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock photo)
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WASHINGTON DC – United States Senators Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.), both members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, sent a letter to Ali Khawar, the Acting Assistant Secretary at the Employee Benefits Security Administration (EBSA) in the Department of Labor (DOL), raising concerns about EBSA’s proposal to grant a one-year “qualified professional asset manager” (QPAM) exemption to Credit Suisse Group AG (Credit Suisse) despite the bank’s impending conviction in an October 2021 judgment for “defrauding U.S. and international investors in the financing of an $850 million loan for a tuna fishing project in Mozambique” and its previous 2014 conviction for “conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service (IRS).” Federal law bars entities with recent convictions from managing clients’ retirement plans, but EBSA’s proposal would allow the bank to continue these lucrative activities while evading accountability for scamming investors and the government.
“The Department of Labor exists to protect American workers and their retirement savings from greed, corruption, and mismanagement. Exempting corporations from consequences for misconduct and allowing Wall Street’s most powerful bad actors to continue business as usual flies in the face of that obligation to the public,” Senators Warren and Smith wrote. “You have the opportunity to send a clear message that the federal government holds corporate criminals accountable for their misdeeds rather than shower them with special regulatory favors. We ask that you review and rescind this proposal.”
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Credit Suisse is currently considered to be a QPAM, which gives Credit Suisse the right to manage or transact with clients’ 401(k) and pension plans. Under EBSA regulations, however, a financial entity is prevented from retaining QPAM status if it has been convicted of criminal activity involving trust management. In 2015, EBSA granted Credit Suisse a 5-year exemption less than a year after its 2014 conviction.
“We are concerned that this proposed QPAM exemption is just the latest example of a troubling pattern in which EBSA continues to grant regulatory favors for large banks that have been convicted of wrongdoing,” wrote the senators. “The agency must develop rules that mitigate these types of risks for workers if their QPAM is involved in illegal activity, not simply repeatedly refuse to enforce the law against large financial institutions that continually break financial laws.”
Read the letter here.
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