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JPMorgan "Pays" but barely. $1.7 billion is nothing out of $100 billion in annual revenue and $2.5 trillion in assets.
by colinbartlett 13y ago
JPMorgan "Pays" but barely. $1.7 billion is nothing out of $100 billion in annual revenue and $2.5 trillion in assets.
- refurb 13y agoDid you read the article? The basically got fined for not doing the SEC's job.
- andr3w321 13y agoWith the know your customer laws http://en.wikipedia.org/wiki/Know_your_customer http://en.wikipedia.org/wiki/Know_your_customer it's increasingly the bank's responsibility to do the job of regulators. This is not new. It might be dumb, but it's how the system works(or doesn't work) right now.
- refurb 13y agoI don't disagree that JPM has a responsibility to share any information they may have about financial fraud. I guess my point is that yeah, the $1.7B fine isn't much to JPM, but at the same time, it seems inline with their degree of negligence.
- spinlock 13y agoKYC is about not doing business with terrorists or other undesirables. Madoff was not one of those. He was running a ponzi scheme but was otherwise an upstanding citizen. No bank would have any reason not to do business with him due to KYC due diligence.
- colinbartlett 13y agoYes, I read the article.
- cma 13y agoIn a way SEC delegated that job to NASD (now FINRA); guess who was on the board of NASD? (Madoff)
- jonknee 13y agoThe SEC's job would have been a lot easier if Madoff had chosen to keep all of his scam's money in an account with the SEC... JPM got to see both sides of the scam and at least one department figured it out and decided to profit on the knowledge.
- darkarmani 13y agoI thought they settled in order to avoid the felonies they committed by not reporting the suspicious activity? They paid to not go to jail. Obviously, they think $1.7B is cheaper than fighting it with their huge legal team. It's not like the Feds are picking on someone defenseless here.
- bonemachine 13y agoThe basically got fined for not doing the SEC's job. No, that's not what they were fined for. They were fined for not doing their job, according to the Bank Secrecy Act. Which they agreed to comply with when they decided to become a bank. You might want to read a couple of news articles about the case, before pulling "facts" out of the air like this.
- blah32497 13y ago"They were fined for not doing their job" Which in this case was also the SEC's job... Your statement doesn't contradict refub's
- this_user 13y agoRevenue is not income. $1.7 bn is a non-trivial amount even for them. Add to that the $13 bn they had to pay on fraudulent mortgage-bonds some weeks ago and things are starting to sum up.
- pfraze 13y agoWasn't like 7 bn of that tax-deductible?
- cma 13y agoThey paid taxes on the ill-gotten gains, so when the gains are taken away in a judgement, there is no need to pay whatever weird quasi-reverse taxes you are thinking of. If the judgment isn't enough after a tax deduction, then just up the judgement. Don't complicate the tax code even further making it start taxing losses. (One fair point might be if they paid capital-gains rates or foreign taxes in Ireland or something on the gains from shorting Madoff and yet could deduct the judgment from full US taxes. I don't think that was the case.)
- awda 13y agoTax deductible doesn't mean they save $7 bn.
- latj 13y ago"them". This is the problem. "They" made billions of dollars illegally. Now, "they" are paying back 1.7 billion dollars. The question is- is it still the same "humans" behind the pronoun? Certainly Madoff is not paying the lifetime of fuck-you money he has blown. At least now he is in jail (or "camp" as he thinks of it). The rest of "them" wont do a single day in prison.
- spinlock 13y agoSo, you think the punishment should fit the revenue rather than the crime? JPM reported Madoff to the SEC in the 90's. They also reported him to the British banking authorities much more recently. The "crime" is actually looking at Madoff's activities and divesting themselves from him. I have no problem with JPM shorting or otherwise taking advantage of this fraud. Given that the SEC is asleep at the switch, the shorts are the best way to protect the financial system.
- joosters 13y agoI have no problem with JPM shorting or otherwise taking advantage of this fraud How is that not profiting from crime?
- twoodfin 13y agoIf you believe, say, that Apple has been faking its revenue and profit numbers for the last 10 years, you can go ahead and short them on the expectation that they'll get caught, Tim Cook will go to jail and the stock will tank. In the meantime, the presence of your short will in some small way drive down the price of AAPL, or at least signal to the rest of the market that somebody believes things are not as rosy for the company as the current price indicates. That's profiting from crime, in a way, but it's all you can do when it's not within your power to subpoena Apple internal memos or what have you. As I read this article, this is more or less this is what JPM is being punished for doing, because in theory the small exotics group in the UK could have called the US headquarters and inspired them to contact the SEC, which didn't happen.