Banks Fined $10.7 Billion in 2012 for Illegal Practices
Major banks this year paid $10.7 billion in fines for everything from laundering money for Iran, to manipulating interest rates paid by consumers and businesses, to improperly foreclosing on homeowners, reports CNN.
While that seems like a staggering fine to most folks, Reuters estimated that the financial sector stocks earned $167.7 billion in profits this year.
More than $5 billion of the fines ended up in the U.S. Treasury, which also loans banks millions of dollars and bails them out.
The fines included about $1.56 billion in U.S. fines paid by UBS and Barclays for manipulating Libor (global interest rates), and $335 million that Deutsche Bank and Flagstar paid for selling mortgages without disclosing the riskiness of the borrowers.
Wells Fargo paid $175 million because it sold subprime loans to minorities even though they qualified for less-expensive traditional mortgages.
The Bank of New York Mellon agreed to pay a $210 million fine to New York authorities for steering customers to ponzi schemer Bernard Madoff.
Penalties have yet to be handed down on the $5.8 billion trading loss at JPMorgan Chase, which is now under investigation, or the fraud that caused the collapse of Peregrine Financial Group.