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10 Things We Learned (or Re-Learned) In Chase's Latest Fraud Deal

By       Message Richard Eskow     Permalink
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JPM, especially CEO Jamie Dimon, repeatedly lied to the public about its own criminal behavior. "We didn't anticipate the lying," Dimon told Roger Lowenstein of the New York Times in a now-notorious 2010 puff piece about Dimon, who had already served six years as head of the serially fraudulent institution.

In that quote, Dimon was attempting to blame homeowners for the poor quality of his bank's securities. We now know that his own bankers, including senior executives, were responsible. From the DOJ's Statement of Facts:

"Prior to JPMorgan purchasing the loans, a JPMorgan employee who was involved in this particular loan pool acquisition told an Executive Director in charge of due diligence and a Managing Director in trading that due to their poor quality, the loans should not be purchased and should not be securitized. After the purchase of the loan pools, she submitted a letter memorializing her concerns to another Managing Director, which was distributed to other Managing Directors. JPMorgan nonetheless securitized many of the loans. None of this was disclosed to investors."

4. Journalists misled the public, too, probably without even realizing it.

From Lowenstein's 2010 profile of Dimon:

"(Dimon) was adamant that government officials -- he seemed to include President Obama -- have been unfairly tarring all bankers indiscriminately. 'It's harmful, it's unfair and it leads to bad policy,' he told me again and again."

That's not misleading. Lowenstein's just reporting what Dimon had to say. But this  is:

"It's a subject that makes him boil, because Dimon's career has been all about being discriminating -- about weighing this or that particular risk, sifting through the merits of this or that loan."

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Using an authoritative tone in an authoritative newspaper, Lowenstein informs us that "Dimon's career has been all about discriminating" and "weighing ... risk." As we now know from the public record: Er, not so much. And Lowenstein's just one of dozens who reported on Dimon this way.

Perhaps the best defense these credulous reporters can offer, now that more of the facts are in, came first from Dimon's lips: "We didn't anticipate the lying."

5. JPM said it wasn't them. It was  them.

JPMorgan Chase executives have consisted argued that they're being punished from fraud committed by the two institutions they acquired with government approval and encouragement, Bear Stearns and Washington Mutual.

But, as the above quotes make clear, JPM's own bankers behaved as badly as those at these institutions, or worse.

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5. Both JPM and the Justice Department have misled the public about the size of this deal.

It's not really a $13 billion deal. This agreement rolls up a number of independent negotiations, each of which would presumably have led to a settlement of some kind. A $2 billion fine will be paid to the prosecutors' office in Sacramento. (Without its vigilance, this deal might never have happened.)

Other funds will go to Federal agencies and state attorneys general. The $4 billion set aside for "struggling homeowners" includes loan concessions the bank was already making out of self-interest. (See David Dayen for more on this topic.)

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Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future

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