The biggest banks in the United States have been fined by the Financial Industry Regulatory Authority, FINRA, today. Fines totaling 4.5 million were levied on the Bank of America Corp (NYSE:BAC) subsidiary Merril Lynch, JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), Goldman Sachs Group, Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS).

JPMorgan Chase

The news was reported earlier by Reuters. At the time of writing, none of the major banks had made statements about the fines, and none had made any indication about whether or not they accepted guilt in the case.

The fines were levied on the banks for offenses relating to the payment of lobbyists. According to the judgement, the banks used state and municipal bond funds to pay lobbyists. The banks allegedly did this using a complex payment in kind system.

It worked like this; the banks made payments to a Californian lobbyist group Cal PSA, then the lobbyist group reimbursed the banks, listing the reimbursements as due for underwriting expenses pertinent to the sale of government and municipal bonds. In effect, the banks were listing the lobbying services as an expense related to bond sales.

The crimes, according to FINRA, took place between 2006 and 2012. The firms also failed to disclose the nature of the fees they were charging to bond issuers. This violated other rules relating to how banks deal with their clients. The lack of a statement from any of the major banks on the ruling makes it appear as if they are simply waiting for the noise to go away.

FINRA is unusual among regulatory agencies, in that it is not a governmental body. It is the financial industry’s self regulating body. That means that it is made up of members of the industry, and is itself liable to regulation from the Securities and Exchange commission.

The tiny magnitude of the fines issued today, $4.5 million, across five of the largest companies in the entire world, means it is not likely worth the time or money for banks like JPMorgan Chase & Co. (NYSE:JPM) to appeal the ruling. The firm will probably absorb the fine. Fighting it could result in a nasty PR problem.

When the financial industry is regulating itself these fines are completely meaningless. They are too small to really mean anything to the firms charged, and the companies involved never have to admit guilt or pay anything more than a slap on the wrist fine for what they’ve done.

The SEC is likely too inundated with more important cases to do a full follow up on this ruling by FINRA. If it is not appealed in court, the details of this case will simply slip away. That is exactly what major banks like JPMorgan Chase & Co. (NYSE:JPM) hope will happen in a case like this.

Since 2008 the big banks have attempted to resurrect their public image. Remaining silent on small grievances like these has been key to that strategy. Today’s violation, like so many others will simply go away.