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Prosecutors Continuing New Strategy Against Wall Street Firms

On February 11, 2013, we posted a blog entitled Interesting Points From the S&P Lawsuit, which detailed the interesting aspects to watch in the wake of the recent S&P lawsuit. It specifically detailed how the U.S. Government has insisted on an admission of guilt from S&P and has not backed down, which is in contrast to its past track-record of settling with Wall Street firms and allowing the firms to deny any wrongdoing in the settlement agreements. On February 18, 2013, Dealbook wrote an article further echoing this new strategy regulators are pushing against Wall Street firms.

Dealbook‘s article, entitled Prosecutors, Shifting Strategy, Build New Wall Street Cases, detailed how the government has continued its push for guilty pleas rather than just the traditional fines and reforms against Wall Street firms. Prosecutors have aimed to apply this approach broadly to financial fraud cases going forward.

The new strategy presents a significant shift because the government has long avoided guilty pleas over fears they will destroy the banks and imperil the broader economy. The Justice Department plans to continue the campaign as it pursues guilty pleas from other Wall Street cases.

Officials say “they are testing the strategy in the interest rate-rigging cases…they suspect that more than a dozen banks falsified reports to influence benchmark interest rates, like LIBOR.