SIGTARP proposal would force big bank CEOs to be accountable for fraud

by Ryan Smith26 Oct 2016
The Special Inspector General of the Troubled Asset Relief Program is proposing a new rule that would force big bank execs to be accountable for shady conduct by their institutions, according to a report.

In her quarterly report to Congress, SIGTARP Christy Goldsmith Romero proposed a rule that would require CEOs and other top executives to sign an annual certification that they had conducted due diligence and could “certify that there is no criminal conduct or civil fraud” in the organization.

“The American people have called for stronger reforms on Wall Street, frustrated by the lack of senior executive accountability at the largest banks,” Romero said in a letter to Congress.

“I have called for Wall Street reform based on the difficulties SIGTARP has faced as a law enforcement agency in proving criminal intent of senior executives at large institutions given how isolated they are from knowledge of fraud in their company. This isolation is part of the culture at large institutions, and is something that is unlikely to change absent reform. That is why I am proposing a reforl to bring accountability to the ‘Insulated CEO’ and other high-level executives.”

Romero said that often large organizations are “purposely designed to insulate top officials from knowing about crime or civil fraud.” The proposed rule would eliminate that excuse, Romero said.

“No longer allowed to stay ‘in the dark,’ a crime and fraud certification forces the CEO to be ‘in the know,’” she said.
 

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