Send a Tweet
Most Popular Choices
Share on Facebook 4 Share on Twitter Printer Friendly Page More Sharing
OpEdNews Op Eds    H3'ed 3/2/12

Bankers Shouldn't Worry About Drum Circles -- But Some Of 'Em Should Worry About Subpoenas

By       (Page 1 of 2 pages)     (# of views)   1 comment
Author 59155
Message Richard (RJ) Eskow
Become a Fan
  (8 fans)

JPMorgan Chase CEO Jamie Dimon recently said that he felt safer in Lebanon than he did when Occupy marched past his house. If nothing else, it proves that Wall Street bankers haven't gotten any better at risk management -- the art of knowing where danger lies and avoiding it -- than they were when their bad bets crashed the economy and caused the Great Recession.

But then we knew that already, didn't we? After all, Chase is one of five too-big-to-fail banks that could lose $80 billion or more from their poorly-thought-out risk-taking in Europe's most troubled countries. The risky behavior shouldn't surprise anyone, though. These banks know -- or at least believe -- that their too-big-to-fail status means we'll rescue them again when they make the next devastating set of blunders.

What's really striking about comments like these is the fact that executives at America's big banks never seem to worry when police cars approach their houses. Their biggest fear is that that they might glimpse a sign or hear the sound of a mic check reverberating faintly through well-aged brick walls.

Consider JPMorgan Chase, the institution run by Mr. Dimon. To call his bank "scandal-plagued" would be putting it mildly. Chase has settled six fraud cases with the SEC over the last 13 years, and is implicated in several ongoing investigations, including the two most notorious fraud cases of our time. At any other moment in history the headlines would be screaming with various combinations of the words "JPMorgan Chase," "fraud," "probe," "drop," mistakes," "disaster," "incompetence," and "scandal."

But these aren't normal times. The public has come to expect that bankers will commit fraud, and that the government will ignore it. They've come to expect that banks will make bad loans, and that the governments of the world will rescue them by making life more difficult for ordinary people.

Money for Nothing

The public has also come to expect that bankers' compensation won't even be tied to the most basic performance measurements. A case in point is Mr. Dimon himself. He earned -- excuse me, a more accurate word would be "received" - roughly $23 million in compensation in 2010. Presumably he was being rewarded for persuading the taxpayer to offer handouts to his bank and others, since that was the only reason any Wall Street bank was still in existence.

But in 2011 the value of JPMorgan's stock fell 17 percent and the bank's credit was downgraded. How much did Mr. Dimon receive? Roughly $23 million. Pay-for-performance? We report, you decide.

(A side comment: As a proud Occupy type, I'm not comfortable with actions that involve anybody's home. Occupy is a proudly peaceful movement, but that doesn't mean people aren't uncomfortable when the place where they live winds up in the spotlight. I've been as tough on him as anyone, but Jamie Dimon has as much of a right to privacy as anyone else. It might make a good proposal for your next General Assembly: Leave people's homes out of any future actions.)

They Stand Accused

Meanwhile back on Wall Street the scandal train rolls on, and JPMorgan Chase holds a first-class ticket. Here are the latest charges and accusations to cross the bank's scandal-plagued portal:

  • The trustee for people who were ripped off by Bernie Madoff is seeking to overturn a judge's ruling and reinstate action against JPM, citing evidence that it knew of Madoff's fraud and concealed it from others;

  • Chase was naive -- at best -- when it lent money to now-disgraced MF Global, which illegally bet its investors' money and lost. Now it's jumping the line of creditors -- most of them victims of massive fraudulent mismanagement it didn't seem to notice -- by filing a lien which would give it preferential treatment over MF Global's victims;

  • JPM is part of an investigation into currency trade rigging in Canada. According to Bloomberg News, "Canadian officials were informed that HSBC Holdings Plc (HSBA), JPMorgan Chase & Co., Citigroup Inc., Deutsche Bank AG, Royal Bank of Scotland Group Plc, ICAP Plc (IAP) and RP Martin Holdings Ltd. took part in the scheme. Employees at the banks agreed to make artificially high or low submissions for Yen Libor to improve the outcomes of trades tied to the rate, the Canadian regulator said."

  • A bond insurer is suing a JPMorgan Chase division for fraudulently misrepresenting the mortgage-backed securities it was insuring;

    Next Page  1  |  2

 

Must Read 1   Well Said 1   News 1  
Rate It | View Ratings

Richard (RJ) Eskow Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Richard (RJ) Eskow is a former executive with experience in health care, benefits, and risk management, finance, and information technology. Richard worked for AIG and other insurance, risk management, and financial organizations. He was also a (more...)
 
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

We're Better off Than Egypt -- Right? Let's Take a Look.

Will Public Outrage Finally Force the President and the States to Prosecute Outlaw Bankers?

Super Collusion: Will Obama and Capitol Dems Betray the Middle Class, Seniors and the Poor?

The GOP Plan to Cut Social Security ... Starting Right Now

Contempt

If the President Won't Do Something About Jobs, Who Will?