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Mirabile Dictu! JP Morgan Finally on Regulatory Hot Seat for Widespread Control Failures and Alleged Lying by Blythe Masters Under OathIt’s been far too long in coming, but Jamie Dimon may finally be getting his comeuppance.
Fraud settlements with SEC
JPMorgan & Libor rigging
Lord knows we’ve had more than enough scandals ginned up by Wall Street over the years, and the message that banking executives proclaim after each is: “Don’t worry, we’ve learned that lesson, and it will never happen again.” Which is how we got to the recent spectacle of Jamie Dimon , the chief executive officer of JPMorgan Chase & Co. (JPM) , testifying twice before Congress that although the bank’s chief investment office was taking huge proprietary risks with some $350 billion of its depositors' money -- and lost $3 billion (and counting) by making a bunch of risky bets on an obscure, thinly traded derivatives contract -- everything is now fine and dandy because the unjustifiable gambling has been stopped dead in its tracks.
Mishadling of customer segregated funds
By Michael Crimmins, who has worked on risk management and Sarbanes Oxley compliance for major banks JP Morgan’s jawdropping revelations in its Friday earnings call don’t seem to be attracting the attention they deserve. The market may have shrugged off the size of the losses and the corporate governance modifications plans, but the announcement opens the door wide for the next phase of this scandal. The biggest question is whether Jamie Dimon should keep his job. The first stunner, that JP Morgan was restating the first quarter financials, should have caused a deafening ringing of alarm bells.
By James Kwak Thirty years ago, Merton Miller, one of the giants of modern finance, was at a banking conference when a banker said he couldn’t raise more capital by selling stock because that would be too expensive: his stock was selling for only 50 percent of book value. Merton responded , “Book values have nothing to do with the cost of equity capital.
"Too Big to Fail"
"The London Whale" Trade
Occupy the SEC Urges the SEC to Investigate JP Morgan Over Likely (As in Bloomin’ Obvious) Sarbanes Oxley Violations #OWS We’ve written at length how the Obama Administration claim that it couldn’t prosecute bank CEOs and senior executives because they didn’t do anything illegal is utter hogwash. Sarbanes Oxley, passed in the wake of Enron, was designed to prevent CEOs and other top executives from escaping liability by claiming they were clueless face men. And it provides for a clear path to criminal prosecutions .
JP Morgan & "Too Big To Fail" taxpayer subsidy
By James Kwak I haven’t been writing about the JPMorgan debacle because, well, everyone else is writing about it. One theme that has stuck out for me, however, has been everyone’s reflexive surprise that this could happen at JPMorgan, supposedly the best and most competent of the big banks. For example, Lisa Pollock of Alphaville, who has provided some of the most detailed analyses of what happened, asked, “could this really happen under CEO Jamie Dimon’s watch?” Dawn Kopecki and Max Adelson at Bloomberg referred to “JPMorgan’s cultivated reputation for policing risk.”
The Shadow Banking System
Financial sector reguatory reform?
Note the little man standing in front of white house. The little worm next to last football field is a truck with $2 billion dollars. There is no government in the world that has this kind of money.
Cognitive Regulatory Capture
What went wrong with finance?
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JP Morgan and systemic risk
With all the talk about JPMorgan's losses out of the CIO's office, nobody is discussing the money the firm made on Friday due to the accounting magic called DVA . After all, CIO's positions were (at least in principle) meant to act as an offset to this earnings volatility. As an example the chart below shows the price action for JPM's newly minted bond (issued just last month). It's a 4% coupon bond maturing in 20 years. With roughly $12bn of this bond outstanding, JPMorgan will record a gain of some $350MM based on Friday's price move just for this bond.
JP Morgan and the revolving door
JPMorgan - lobbying