Mary Schapiro, chairwoman of the Securities and Exchange Commission (SEC), was forced to bat away criticisms around its practice of not requiring banks to admit any wrongdoing in settlements.

Public interest

Last November, a US judge rejected a $285 million agreement struck between SEC and Citigroup over mortgage fraud allegations. Judge Jed Rakoff stated that as there had been no agreement of any wrongdoing it would be impossible for him to rule whether the settlement was fair and in the public interest.
Ms Schapiro has argued that if banks admit to wrongdoing in the SEC settlements, they will be left open to civil lawsuits over the same incident.

Repeat offenders

But The Daily Telegraph newspaper in the UK said the role of the commission as a deterrent has also been questioned, as some firms are being repeatedly charged for violating the same laws. And research from the New York Times suggests nearly all the biggest Wall Street firms have settled fraud cases by promising never to violate a law that they had already promised not to break.
Ms Schapiro accepted repeat offenders are a problem, but said that the commission will continue with their methods ‘so that people don’t forget that they have these obligations and that somebody is watching them and willing to hold them accountable.