Yesterday, BNP Paribas and U.S. prosecutors finally settled after months of negotiations over the bank’s “Tour de Fraud.” BNP will pay an $8.9 billion fine — the largest the U.S. has ever levied against a foreign bank — fire or discipline over 50 employees (many of whom had already left the bank or “retired”), and plead guilty to criminal charges that it violated U.S. sanctions by providing dollar-clearing services in Iran, Sudan, and Cuba. The bank will be barred from conducting certain dollar-clearing operations for a year, starting in January 2015, and from clearing transactions for other outside banks in New York and London for two years. The WSJ has a good summary of what that means for the bank and its clients.
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U.S. Attorney General Eric Holder would like you to think that large financial institutions are not “too big to jail”. The Justice Department has been investigating two foreign institutions, France’s BNP Paribas and Switzerland’s Credit Suisse, for months, looking to bring criminal charges against a bank for the first time in decades. This week, it finally seems like they are closing in.