How a Memo Cost Big Banks $37 Billion

The Wall Street Journal:

Assistant U.S. Attorney Richard Elias was leafing through a pile of J.P. Morgan Chase & Co. documents while tending to his newborn son in 2012 when he found something that came back to haunt the three largest U.S. banks.

In a memo, one J.P. Morgan employee warned her bosses they were putting bad loans into securities being created before the financial crisis hit.

The U.S. attorney’s office in Sacramento, Calif., soon started sending subpoenas to J.P. Morgan officials tied to the memo. Three months later, top Justice Department officials in Washington told investigative teams across the country to hunt for similar ammunition in tens of millions of documents from other banks, especially Bank of America Corp. andCitigroup Inc.

In a move meant to shake money from the banks, the Justice Department decided to go after them with an unusually potent law created to clean up the savings-and-loan crisis of the 1980s. The law has a lower burden of proof than other laws used by the agency to punish alleged fraud, a much longer statute of limitations and potentially astronomical financial penalties.

Mr. Elias’s discovery has delivered a whopping payoff so far: $36.65 billion, representing the cost of the government’s three separate settlements with the banks since late 2013, including the $16.65 billion deal with Bank of America in August that is the largest ever between the U.S. and a single company.

My emphasis.  As bank employees seem immune from criminal charges, how, exactly does the WSJ suggest we penalize wrong-doing if not by fines?