With a $1.5 billion fine -- one of the largest penalties ever brought against a financial institution by U.S. regulators -- levied against UBS last week, it’s clear that the government is hammering down on banks. And UBS’s massive penalty wasn’t even the largest imposed on a financial institution: Earlier this month, it was surpassed by a whopping $1.9 billion fine against HSBC.
While these two huge payouts are among the steepest penalties ever paid by banks, they are merely among a long list of charges over the past few years that have been brought against firms associated with the 2008 financial crisis.
The onslaught of suits this year, in particular, is for good reason: regulators are racing against the clock to charge the perpetrators responsible for the biggest economic crisis since the Great Depression. A legal deadline for filing charges related to the economic crisis is approaching, as federal securities law typically dictates a five-year statute of limitations for fraud cases. Given that most of the violations occurred in 2007 and 2008, those five years are about up. As the opportunity to litigate dwindles, however, regulators might turn to tolling agreements, which could suspend the statute of limitations and give them more time to assess their claims.