Banks’ power vacuum finally being challenged

To see how the federal government has pursued money-laundering cases against big banks over their dealings with Iran and other countries under US trade sanctions, consider what happened when Barclays and the justice department were required to file reports describing the UK bank’s co-operation under a settlement in 2010.

The deadline came and went. Barclays and the justice department failed to comply, infuriating US district judge Emmet Sullivan, who had ordered that the reports be filed. “I am amazed that with all the legal talent before the court that no one opened the order to read it,” he said.

A justice department attorney, Kevin Gerrity, told the judge he couldn’t explain the lapse. Before approving Barclays’s deferred prosecution agreement, Sullivan called it a “sweetheart deal”. Barclays paid $298m (€242), its core business was unscathed, and no executives were charged.