First, a bank’s commodities trading department takes metals investors for a ride like unwitting victims in the back of Jeffrey Epstein’s “Lolita Express.”

Now federal prosecutors have extended the same sort of cozy non-prosecution agreement to shield the bank itself from a criminal indictment.

Federal prosecutors signed a non-prosecution agreement in June with Merrill Lynch Commodities, Inc. (MLCI) and Bank of America (Merrill’s parent company) for rigging the precious metals markets.

The U.S. Department of Justice (DOJ) found gold and silver traders working at Merrill Lynch had “schemed to deceive other market participants by injecting materially false and misleading information into the precious metals futures market.”

The agreement references “thousands of fraudulent orders” – intended artificially to move the markets up or down by “spoofing” other traders and investors – over a period of 6 years.

Two traders have been indicted on criminal charges so far. The non-prosecution agreement was only for the mega bank, not for its more expendable staff.

The bank gets off with a less-than-consequential $25 million fine, a promise not to do it again, and a commitment to set up more controls… which they can self-monitor.

The generous agreement was granted in part because “MLCI has no prior criminal history.” The prosecutors who drafted the agreement must not have had access to the Department’s own files, or the internet.

Suffice it to say the malfeasance covered here isn’t the first bit of shady activity Merrill has been involved in. DOJ prosecutors also didn’t take into consideration Bank of America’s own record. Both organizations have been implicated in schemes, scandals, and frauds going back decades.

Here is a partial list of what the bankers have been accused of doing to clients, shareholders and other victims (a more complete accounting can be found here):

• Screwing the State of California as its Bond Trustee
• Charging excessive fees
• Withholding information from shareholders
• Foreclosure fraud
• Deceptive sales practices

Maybe prosecutors limited their definition of “criminal history” to past criminal convictions. There would undoubtedly be a lot more of those if Justice Department prosecutors stopped settling and signing non-prosecution agreements and instead started taking the banks to trial for their role in crimes.

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