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This was only true up until recently. In the last year B of A and JP Morgan settled for $17b[1] and $13b[2] respectively. Each settlement was more than their ne

by rqebmm 12y ago

This was only true up until recently. In the last year B of A and JP Morgan settled for $17b[1] and $13b[2] respectively. Each settlement was more than their net income for the preceding year. That hurts. A lot. Furthermore, the settlements since 2008 have largely not precluded the banks from facing criminal charges[2]. The Justice department needs to get these initial settlements out of the way before they can pierce the corporate veil and pursue criminal action against individuals and these giant banks unsurprisingly have spent lots of money and lawyers dragging these investigations out for the last 6 years. I'm ever an optimist, but I think it's inevitable that some criminal charges are still coming. Those charges will likely fall on scapegoats, but still. [1]http://www.masslive.com/business-news/index.ssf/2014/08/bank_of_america_weighs_17_billion_settle.html http://www.masslive.com/business-news/index.ssf/2014/08/bank... [2]http://money.cnn.com/2013/11/19/investing/jpmorgan-mortgage-settlement/index.html http://money.cnn.com/2013/11/19/investing/jpmorgan-mortgage-...

uncoder0 12y ago
A bit pedantic but, at the bottom of [2] it says Net Income for JP Morgan was $21b for 2012 and the settlement for $13bn was in 2013. Looks like BoA's amount was indeed over their previous years net income. Is one years net income really enough? How many billions are the american tax payers on the hook for due to their behavior? They're also getting free money from QE which doesn't seem that punitive. Admittedly I don't know all that much about finance or monetary policy. On your other point it would be interesting to see if a new Justice department under someone other than Holder does anything differently. Does anyone know the length on the statue of limitations of the sort of crimes they're accused of criminally?
malandrew 12y ago
Part of the problem in the past is that we've expected the justice department to go after the heads of the bank. This has been wholly ineffective when we do try because the people at the top do a great job as shielding themselves from hard evidence that implicates them. What I like about this new approach is that the focus is on the rank and file traders and other employees. The great thing about this new strategy is that it gives all these lower level employees caught in a criminal investigation net and incentive to produce the hard evidence necessary against their bosses as part of a plea bargain. Once we go through at least one round of these types of criminal investigations, any future lower level employees would be stupid if they didn't intentionally keep hard evidence against their bosses in their possession as a get out of jail free card next time the shit hits the fan. All in all, splendid news.

by rqebmm 12y ago

uncoder0 12y ago

A bit pedantic but, at the bottom of [2] it says Net Income for JP Morgan was $21b for 2012 and the settlement for $13bn was in 2013. Looks like BoA's amount was indeed over their previous years net income. Is one years net income really enough? How many billions are the american tax payers on the hook for due to their behavior? They're also getting free money from QE which doesn't seem that punitive. Admittedly I don't know all that much about finance or monetary policy. On your other point it would be interesting to see if a new Justice department under someone other than Holder does anything differently. Does anyone know the length on the statue of limitations of the sort of crimes they're accused of criminally?

malandrew 12y ago

Part of the problem in the past is that we've expected the justice department to go after the heads of the bank. This has been wholly ineffective when we do try because the people at the top do a great job as shielding themselves from hard evidence that implicates them. What I like about this new approach is that the focus is on the rank and file traders and other employees. The great thing about this new strategy is that it gives all these lower level employees caught in a criminal investigation net and incentive to produce the hard evidence necessary against their bosses as part of a plea bargain. Once we go through at least one round of these types of criminal investigations, any future lower level employees would be stupid if they didn't intentionally keep hard evidence against their bosses in their possession as a get out of jail free card next time the shit hits the fan. All in all, splendid news.