Send a Tweet
Most Popular Choices
Share on Facebook Share on Twitter Share on LinkedIn Share on Reddit Tell A Friend Printer Friendly Page Save As Favorite View Favorites
OpEdNews Op Eds

Why JPMorgan Chase Doesn't Deserve Your Sympathy

By       Message Richard Eskow       (Page 1 of 2 pages)     Permalink    (# of views)   No comments

Related Topic(s): ; ; , Add Tags
Add to My Group(s)

Must Read 2   Supported 2   Interesting 1  
View Ratings | Rate It Headlined to H3 10/22/13

Author 77715
Become a Fan
  (14 fans)
- Advertisement -

Scandal-tainted megabank JPMorgan Chase is losing legal ground in the wake of its multi-year crime wave (if the term "crime wave" seems harsh, we invite you to review the evidence herehere, and here.) But in the wake of its tentative $13 billion settlement with the federal government, it may be on the verge of winning at least one battle -- in the court of public opinion.

Some people are convinced this deal victimizes America's largest bank. A victim? In case you need a refresher course, here's a much abbreviated list of the bank's well-documented misdeeds (a full list is here):

"Violations of the Bank Secrecy Act; laundering money for the Mexican drug cartels; violation of sanction orders against Iran, Cuba, Syria, and Liberian dictator Charles Taylor; knowingly executing fictitious trades; fraudulent sale of unregistered securities; bid-rigging; bribery in Jefferson County, Alabama; energy market manipulation; and mistreating active duty members of the Armed Forces by violating the Servicemembers Civil Relief Act."

Some victim.

- Advertisement -

And yet, despite its long and well documented string of frauds and other crimes, the bank is nevertheless gaining some sympathy for the argument that $13 billion is an excessive amount. Here's why that's not true.

Chase is feeling no pain.

The current stock price of $54.27 (as of this writing) is higher than it was one month ago, before the settlement was reached. It's higher than it was two weeks ago. It's higher than it was one week ago. It's higher than it was on the last day of active trading, or the day before that.

- Advertisement -

Investors seem to think this is good news. But even banks with good luck can encounter an occasional injustice. Is that what's happening here, as Chase's defenders are claiming?


It's not about the subsidiaries.

The most common argument one hears is that $13 billion is excessive because most of the misdeeds addressed in the settlement were committed by Chase acquisitions Bear Stearns and Washington Mutual, and that most of the wrongdoing took place before Chase acquired them. Here's why that argument is wrong:

First, we only have only JPMorgan's word for that -- the bank has said that these subsidiaries are responsible for 70% or 80% of the fraud in question. Remember, CEO Jamie Dimon also told everyone -- including investors, toward whom he has legal obligations -- that the London Whale case was a "tempest in a teapot." We now know he knew otherwise at the time he said it.

Second, we don't know the total value of the fraud that may have been committed in this case. Even if we accept the possibility that Chase was only responsible for less than one-third of the fraud, which is their contention, it doesn't necessarily follow that the bank should only pay one third of $13 billion. The entire fraud committed in this case may be significantly larger than that.

- Advertisement -

If it was greater than $39 billion then, even by that standard, this settlement might be reasonable or even too low.

It's not a lot of money compared to the scope of the alleged misdeeds.

How big is  the fraud in question?

Next Page  1  |  2


- Advertisement -

Must Read 2   Supported 2   Interesting 1  
View Ratings | Rate It

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

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon Share Author on Social Media   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
Related Topic(s): ; ; , Add Tags

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

How to Fix the Fed: Dismiss Dimon, Boot the Bankers, and Can the Corporations

The Top 12 Political Fallacies of 2012

Pawn: The Real George Zimmerman Story

What America Would Look Like If Libertarians Got Their Way

"F" The Bureaucracy! The White House Can Help Homeowners Right Now

"His Own Man's" Man: Jeb Bush and the Return of Wolfowitz