7 ms·

The $9B Witness: JPMorgan Chase's Worst Nightmare

270 points by winstonsmith 12y ago

rdudek 12y ago
Does Statute of Limitations apply to this?
- bavcyc 12y ago
  The article mentions the statute of limitations applies in some instances but the time frame for wire fraud has not run out.
bhahn 12y ago
Isn't there a reward for whistle blowing financial crimes? Is she not eligible for it?
- ceejayoz 12y ago
  Yes, and it's 10-30% of what they collect. http://www.sec.gov/whistleblower http://www.sec.gov/whistleblower Largest thus far is $30M - http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370543011290#.VF0O-VPF9-g http://www.sec.gov/News/PressRelease/Detail/PressRelease/137...
- seiji 12y ago
  Isn't there a reward for whistle blowing financial crimes? She already did the leaking to the regulators. The legal system buried it. So this is more like meta-leaking. The article is her ignoring the US legal system because it's been literally purchased by the banks and lets the billionaires get more billionaire-y while the rest of the world burns.
jobu 12y ago
”The kid-gloves approach that the DOJ and the SEC take with Wall Street is as inexplicable as it is indefensible,” says Dennis Kelleher Well said. Here's hoping this will result in some civil suits against individuals at Citi, if not actual jail time.
- seiji 12y ago
  Here's hoping this will result in some civil suits against individuals at Citi, if not actual jail time. That's the problem, right? Years of "we're getting to this soon!" "We're on your side!" "We're going to get those bad guys!" Then, you look back, and 5 years later you see nothing has happened. The "justice" system is lying, running out the clock, and just trying to hope everybody ignores bad people in powerful positions doing bad things without any meaningful, and personal, repercussions.
- anonbanker 12y ago
  The solution in most of these cases is "handcuff one of the bastards publicly; then the people put down their pitchforks and forget about all the accomplices". Don't believe me? Look up how many people went to jail for: * Tycho * Global Crossing * Enron * HealthSouth * Madoff * the S&L Scandals of the late 80's * Washington Mutual
  - winstonsmith 12y ago
    The solution in this century's financial crisis has been "handcuff none of the bastards", but it wasn't always so. I'm surprised you cite the savings and loan scandal as a case of criminals not going to jail because in that crisis there were over 1000 felony convictions of high level people (usually the CEO and CFO). Since that crisis was 1/70th the size of the recent crisis, by strict proportionality (all things being equal, etc.) there would have been 70,000 felony convictions of high level people in this crisis. All thing are not equal of course, but there weren't 70,000 or 7,000 or 700 or 7 convictions of high level people in this crisis. There were none! Things really have change dramatically for the worse. William Black on Moyers and Company[1]: Sure. The savings and loan debacle was one-seventieth the size of the current crisis, both in terms of losses and the amount of fraud. In that crisis, the savings and loan regulators made over 30,000 criminal referrals, and this produced over 1,000 felony convictions in cases designated as “major” by the Department of Justice. But even that understates the degree of prioritization, because we, the regulators, worked very closely with the FBI and the Justice Department to create a list of the top 100 — the 100 worst fraud schemes. They involved roughly 300 savings and loans and 600 individuals, and virtually all of those people were prosecuted. We had a 90 percent conviction rate, which is the greatest success against elite white-collar crime (in terms of prosecution) in history. [1] http://billmoyers.com/2013/09/17/hundreds-of-wall-street-execs-went-to-prison-during-the-last-fraud-fueled-bank-crisis/ http://billmoyers.com/2013/09/17/hundreds-of-wall-street-exe...
pb8226 12y ago
Someone other than the current politicians need to be in office for this to result in any serious consequences for the banks. The banks have bought the politicians in the U.S.
- chaostheory 12y ago
  The problem is that no one chooses an alternative candidate who doesn't belong to one of the major two parties. Moreover all of the money is being funneled into those two parties.
  - pb8226 12y ago
    Yep, my otherwise intelligent coworkers insist on voting Democrat or Republican. Kinda depressing.
    - JoeAltmaier 12y ago
      ...because they might win? Its a two-party system like it or not.
      - dragonwriter 12y ago
        Well, if you don't like it, you could work to fix it -- which, at the state level in states that have provisions for citizen ballot initiative, doesn't even rely on gaining support from those elected under the present electoral system.
      - thuuuomas 12y ago
        Regardless of the letter beside the person's name, money talks & shit walks. Either party (nationally, on the whole) could truthfully be described as "Centrist-Corporatist".
        dragonwriter 12y ago
        I think its probably more accurate to say that one is Center-Right/Corporatist and the other is Far-Right/Corporatist.
steven2012 12y ago
The fact that this has been going on sickens me. The entire US infrastructure is corrupt (actually probably the entire world's infrastructure). There was the article a few weeks ago about how the Federal Reserve was in bed with the likes of Goldman Sachs, and a whistleblower came out and still nothing was done. But what do we do as a generation of people that don't want this? The closest thing to come was Occupy Wall Street, but that fizzled out. Is there a way to organize ourselves and vote in blocks to get rid of these current politicians and elect a new generation that hopefully isn't as corrupt? Yes, I know, it's a pipe dream.
- nutschig 12y ago
  Exit the financial system. Use Bitcoin.
  - cmapes 12y ago
    Not realistic if you run a business that actually operates in the real world.
    - Andrew_Quentin 12y ago
      I'm not sure what you mean exactly. Rome was not built in one day, but with small steps. If you wish change then you take small actions that of course do not build a palace today, but might do in 10 years. That basically translates to use bitcoins alongside dollars and slowly transition to bitcoins only.
      - dd36 12y ago
        Why are bitcoins a solution to a corrupt criminal justice system?
        throwaway344 12y ago
        Yeah, I've never understood the logic that using Bitcoins insulates someone to the normal financial system. If you want a loan, put money in a bank account, or hedger risk, or do anything with your money that isn't just moving it from address to address, it is still needed to have banks. Or have cryptocurrency fans figured out a solution that I can't think of now.
bradleyjg 12y ago
I'm actually somewhat sympathetic to the DoJ's argument regarding criminal convictions of the banks. The concept of corporate criminal conduct is somewhat problematic, and the collateral consequences of conviction can be dire for innocent third parties. But there is absolutely no justification for their sheer and utter lack of diligence in pursuing criminal cases against individuals. Holder, Breuer, Bharara and those who worked with them ought to be ashamed of themselves.
- mbreese 12y ago
  One solution is to extend the "corporations are people too" concept to the logical conclusion. It's just harder to jail a corporation aside from fines. A corporate death penalty would be nice to see for some of the most egregious cases, including a "show-cause" requirement to allow executives to take leadership positions in another public company or one in a regulated industry. This is fraught with problems though... you could kill the corporation, shame the executives, but tens of thousands could still be out of a job, and in the financial industry you'd wreak havoc on the entire economy. I'm not sure if it is worth the risk. Realistically, I'm not optimistic that this will ever happen in a meaningful way...
  - tracker1 12y ago
    Eliminate corporate taxes, and corporate personhood as legal concepts, establish non-living entities as a legal class without certain rights (unable to donate to political campaigns). Limit unused and under-used assets a corporation can own (If a company owns property it doesn't use, or has an excess of liquid assets they are ceased by the govt). Do those things, and a lot of the rest would sort itself out. Companies would need to constantly grow (Amazon) or downsize to their actual value-add (Banks).
omgitstom 12y ago
Unfortunately, we can't do anything to fix the past. It is clear that there was a cover up. The number of banking execs that have gone to jail can be rounded down to zero. I wish our politicians / president would grow a pair and do what is best for the American public and break up the big banks and remove them from political donations / lobbying.
seanv 12y ago
i remember hearing about the settlement on the radio and was like Great! At least some investors will get compensated for being scammed... then I read this: "Couple this with the fact that the bank's share price soared six percent on news of the settlement, adding more than $12 billion in value to shareholders, and one could argue Chase actually made money from the deal. What's more, to defray the cost of this and other fines, Chase last year laid off 7,500 lower-level employees. Meanwhile, per-employee compensation for everyone else rose four percent, to $122,653. But no one made out better than Dimon. The board awarded a 74 percent raise to the man who oversaw the biggest regulatory penalty ever, upping his compensation package to about $20 million." Just amazing
- berberous 12y ago
  Taking a 6% pop as evidence Chase made money from the deal is ridiculous. I'm not going to waste time pulling up charts of their share price, but if I had to bet, their shares were depressed while the overhang of legal liability remained. For example, the price could have been down over 6% due to news of the possible liability, and then popped back 6% when settled. So they would have lost on the deal.
  - dd36 12y ago
    Presumably the top executives own lots of stock. Thus, getting a criminal probe squashed directly benefits their pocketbooks. I assume that's the thinking.
shkkmo 12y ago
Is there any way Holder and the people that orchestrated the cover up can be charged with corruption and negligence? I'm all for criminal consequences for the bank executives, but it sounds like we also need criminal consequences for coverups by the DOJ.
bmmayer1 12y ago
This is basically a perfect example of how "capitalism" in the US is not capitalism anymore. No corporation should be insulated from the financial downside of its incompetence. In the real world, Chase should have gone under or at least lost a hundred billion in market cap, but instead they are in cahoots with government regulators to limit their downside and protect their upside from what is their fault. This is not capitalism! And it's painful to see how this hybrid growth-corporatist model trump true innovation and economic progress. It's an insult to free market economics and democracy at the same time. Rant over. One addendum: jail time isn't the answer. Putting an executive in a minimum security prison for 5 years just lets another one take his place. CEOs aren't afraid of jail time, they're afraid of losing money. If you let banks fail who deserve it then creative destruction will ensure stronger, better and safer banks in the future. Capitalism can't survive without profit and loss working hand in hand.
- Sherlock 12y ago
  When banks go down they take down the economy with them; that's what 'too big to fail' means. It's not worth all the human suffering caused by a depression instead of a recession just to prove that the banks should be more cautious.
  - nulltype 12y ago
    Then don't allow large banks.
    - josefresco 12y ago
      Cat's already out of that bag on that one. The issue now is regulation and passing laws to control and reign in power on those large banks. Unfortunately the public doesn't get excited about passing complicated financial regulations.
      - Andrew_Quentin 12y ago
        And if you can't punish them for breaching those regulations what worth are they?
pjungwir 12y ago
I hate the idea of giving these banks special treatment to keep them solvent, but if that's really necessary, fine. But there's no reason we can't lock up all the executives and fine them personally.
- javajosh 12y ago
  Yes, this is an important point: bailouts and jail time are not mutually exclusive.
- josefresco 12y ago
  I agree. Now that the world's focus is on other topics, the feds should have kept a list of names and came down hard on those responsible. During the crisis prosecution would have been risky, but now that the world has moved on (slightly) I don't believe it would rock investors to see some executives go down and admit major fault.
dmunoz 12y ago
Slightly off-topic, but I missed this from last week: the author of this piece, Matt Taibbi, has departed with First Look media. I wonder if he is back at Rolling Stone for good, or just sold this piece to them. There are two interesting notes on the matter. One, the notice of departure [0], and then a longer piece on "The Inside Story Of Matt Taibbi's Departure From First Look Media" [1]. The second links contains some interesting snippets: "Taibbi’s dispute with his bosses instead centered on differences in management style and the extent to which First Look would influence the organizational and corporate aspects of his role as editor-in-chief. Those conflicts were rooted in a larger and more fundamental culture clash that has plagued the project from the start: A collision between the First Look executives, who by and large come from a highly structured Silicon Valley corporate environment, and the fiercely independent journalists who view corporate cultures and management-speak with disdain." It also notes that The Intercept had similar problems while launching. I also found it interesting that this is the first time I have actually heard what Taibbi was trying to do with First Look: "His vision was a hard-hitting, satirical magazine in the style of the old Spy that would employ Taibbi’s facility for merciless ridicule, humor, and parody to attack Wall Street and the corporate world." [0] https://firstlook.org/2014/10/28/important-announcement/ https://firstlook.org/2014/10/28/important-announcement/ [1] https://firstlook.org/theintercept/2014/10/30/inside-story-matt-taibbis-departure-first-look-media/ https://firstlook.org/theintercept/2014/10/30/inside-story-m... Edit: Happened upon some additional details about the conflict at NYMag [2]: "Over the last year, however, the center of gravity of the organization has shifted, as Omidyar and his Silicon Valley braintrust have exerted control over budgets and vacillated over the journalistic mission. Over the summer, Omidyar appointed a longtime confidante, John Temple — a former newspaper editor who previously led an Omidyar-financed civic journalism venture in Hawaii — to be the president for audience and products, putting him in a position above Eric Bates, the former Rolling Stone editor who was brought on as a First Look editorial director, who is close to Taibbi." [2] http://nymag.com/daily/intelligencer/2014/10/matt-taibbi-disappears-from-omidyars-first-look.html http://nymag.com/daily/intelligencer/2014/10/matt-taibbi-dis...
- bostik 12y ago
  I'm (again) badly torn. When Taibbi left for First Look, he was forced to delay publication of any of his pending articles. I knew something big was brewing, but I also had great expectations for FLM. Then, nothing happened. FLM kept announcing new hires, Taibbi was supposedly neck-deep in admin, and the article never materialised. Now, with just two weeks after his departure from FLM, we are blessed with a heavy-hitting Taibbi piece from Rolling Stone. So I'm torn, because on one hand I'm personally delighted to have Taibbi writing again. But on the other hand I'm genuinely worried about FLM's future direction. From your comment I have to assume the worry is not unwarranted.
pb8226 12y ago
Summary from ZeroHedge: http://www.zerohedge.com/news/2014-11-07/why-matt-taibbi-thinks-woman-jpmorgans-worst-nightmare http://www.zerohedge.com/news/2014-11-07/why-matt-taibbi-thi...
KaoruAoiShiho 12y ago
To me it seems like the bug in the system is the arrangement between the prosecutor and Chase to fake prosecuting criminal charges after settling the civil suit. That's willful deception of the American people and should be illegal. If you fix this it seems like this would end satisfactorily.
AnimalMuppet 12y ago
It's not as bad as it could be. JPMorgan spent 9 billion dollars to keep her off the witness stand. But it seems that they never seriously tried to kill her. Note well: I am not advocating murder! It's just that, since things didn't go that way, things aren't yet as bad as the most cynical of us assume they are.
- cjslep 12y ago
  > It's not as bad as it could be. JPMorgan spent 9 billion dollars to keep her off the witness stand. ...but they didn't really spend 9 billion if you read the article: For starters, $4 billion of the settlement was largely an accounting falsehood, a chunk of bogus "consumer relief" added to make the payoff look bigger. What the public never grasped about these consumer--relief deals is that the "relief" is often not paid by the bank [...] but by the bank's other victims Moreover, in this case, a fine-print addendum indicated that this consumer relief would be allowed only if said investors agreed to it – or if it would have been granted anyway under existing arrangements. [...] The average person had no way of knowing what a terrible deal the Chase settlement was for the country. The terms were even lighter than the slap-on-the-wrist formula that allowed Wall Street banks to "neither admit nor deny" wrongdoing – the deals that had helped spark the Occupy protests. EDIT: And, to add insult to injury: Because most of the settlement monies were specifically not called fines or penalties, Chase was allowed to treat some $7 billion of the settlement as a tax write-off. Couple this with the fact that the bank's share price soared six percent on news of the settlement, adding more than $12 billion in value to shareholders, and one could argue Chase actually made money from the deal. I would argue that it is much worse than you initially imagined.
- tim333 12y ago
  >they never seriously tried to kill her. Yeah they are not as bad as Russia. They could still aim higher though. Transparency International has the US at 73/100 on it's corruption index, ranking no 17. Denmark and New Zealand are the leaders at 91/100. Come on USA, you can improve! http://files.transparency.org/content/download/700/3007/file/2013_CPIBrochure_EN.pdf http://files.transparency.org/content/download/700/3007/file...
deleted 12y ago
[deleted]
jokoon 12y ago
I really wouldn't want to be in Holder's shoes. I really wonder how he managed to get to this. I don't understand what kind of discussions holder and dimon had, but all I can really understand is that they're only human. After all, all of this boiled to 2 sides negotiating like in a classic political game, and one side won, and I don't know if the good side really won... I just pity Holder for mismanaging this. Or maybe there are more horrific details we haven't heard of yet. I don't know which one is the more frightening. One only thing, it's now more than 6 years that all of this happened, and it doesn't seem really over.
- winstonsmith 12y ago
  >I just pity Holder for mismanaging this. Or maybe there are more horrific details we haven't heard of yet. Your pity would be misplaced; there are horrific details. A large part of the problem is that there is a revolving door between the DOJ and the law firms that represent financial firms (likewise for the SEC). Holder was assistant AG in Clinton's DOJ, then he moved to the law firm Covington and Burling where he represented the bank UBS among other clients, now he's back at the DOJ, and soon he will likely move back to the private sector where he will be handsomely rewarded for his service to the finance industry while AG. The big picture is that the Obama administration is to Finance as the Bush administration was to Oil, but for horrific details about Obama's economic team, read this: http://www.vice.com/en_uk/read/larry-summers-and-the-secret-end-game-memo http://www.vice.com/en_uk/read/larry-summers-and-the-secret-... .
pasbesoin 12y ago
I happened to click (TV remote) into the latter part of an interview with her on Amy Goodman's program, "Democracy Now". One of the local PBS stations has started carrying that program, recently. After a few recent, similar surprises with it -- each one keeping me glued to it despite the late hour, until the end -- I've made a mental note to start catching it regularly. As I've said before with respect to this fiasco and the Administration as well and Congress' response, as a mantra: No jail? You fail. I recall an interview with one of the lead investigator's/prosecutors during the 1980's Savings and Loan (aka S&L) scandal. Someone really in a position to know. He expressed similar disappointment, and more so he described in detail how things could have been done differently. I also recall comments around or shortly after the peak of the recent crisis, from Sheila Bair as well as Elizabeth Warren. Particularly from Bair -- as I recall it, roughly: Too big to fail be damned. She/they were ready to take those banks into receivership, if the political leadership would only give the go ahead. And no common account holder/investor need lose their shirt as a result of that process. Market panic might have been another matter. But I think, now, that that would have been a lesser cost than the one we will now end up, as a society -- or rather, multiple societies -- paying. As far as I'm concerned, no statute of limitation should apply to the crimes surrounding these events. Particularly to the perversion of justice that has initially gotten these blackguards off the hook. Law is a social convention, and they have so flouted social convention, that I for my part no longer deign to extend it to them. Like barbarians they acted? Well, let them so be treated.
tim333 12y ago
You can see 'em on video on Democracy Now! - "Bank Whistleblower Alayne Fleischmann & Matt Taibbi on How JPMorgan Chase Helped Wreck the Economy" http://www.democracynow.org/2014/11/7/matt_taibbi_and_bank_whistleblower_on http://www.democracynow.org/2014/11/7/matt_taibbi_and_bank_w...

270 points by winstonsmith 12y ago

rdudek 12y ago

Does Statute of Limitations apply to this?

bavcyc 12y ago
The article mentions the statute of limitations applies in some instances but the time frame for wire fraud has not run out.

bhahn 12y ago

Isn't there a reward for whistle blowing financial crimes? Is she not eligible for it?

ceejayoz 12y ago
Yes, and it's 10-30% of what they collect. http://www.sec.gov/whistleblower http://www.sec.gov/whistleblower Largest thus far is $30M - http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370543011290#.VF0O-VPF9-g http://www.sec.gov/News/PressRelease/Detail/PressRelease/137...
seiji 12y ago
Isn't there a reward for whistle blowing financial crimes? She already did the leaking to the regulators. The legal system buried it. So this is more like meta-leaking. The article is her ignoring the US legal system because it's been literally purchased by the banks and lets the billionaires get more billionaire-y while the rest of the world burns.

jobu 12y ago

”The kid-gloves approach that the DOJ and the SEC take with Wall Street is as inexplicable as it is indefensible,” says Dennis Kelleher Well said. Here's hoping this will result in some civil suits against individuals at Citi, if not actual jail time.

seiji 12y ago
Here's hoping this will result in some civil suits against individuals at Citi, if not actual jail time. That's the problem, right? Years of "we're getting to this soon!" "We're on your side!" "We're going to get those bad guys!" Then, you look back, and 5 years later you see nothing has happened. The "justice" system is lying, running out the clock, and just trying to hope everybody ignores bad people in powerful positions doing bad things without any meaningful, and personal, repercussions.
anonbanker 12y ago
The solution in most of these cases is "handcuff one of the bastards publicly; then the people put down their pitchforks and forget about all the accomplices". Don't believe me? Look up how many people went to jail for: * Tycho * Global Crossing * Enron * HealthSouth * Madoff * the S&L Scandals of the late 80's * Washington Mutual
- winstonsmith 12y ago
  The solution in this century's financial crisis has been "handcuff none of the bastards", but it wasn't always so. I'm surprised you cite the savings and loan scandal as a case of criminals not going to jail because in that crisis there were over 1000 felony convictions of high level people (usually the CEO and CFO). Since that crisis was 1/70th the size of the recent crisis, by strict proportionality (all things being equal, etc.) there would have been 70,000 felony convictions of high level people in this crisis. All thing are not equal of course, but there weren't 70,000 or 7,000 or 700 or 7 convictions of high level people in this crisis. There were none! Things really have change dramatically for the worse. William Black on Moyers and Company[1]: Sure. The savings and loan debacle was one-seventieth the size of the current crisis, both in terms of losses and the amount of fraud. In that crisis, the savings and loan regulators made over 30,000 criminal referrals, and this produced over 1,000 felony convictions in cases designated as “major” by the Department of Justice. But even that understates the degree of prioritization, because we, the regulators, worked very closely with the FBI and the Justice Department to create a list of the top 100 — the 100 worst fraud schemes. They involved roughly 300 savings and loans and 600 individuals, and virtually all of those people were prosecuted. We had a 90 percent conviction rate, which is the greatest success against elite white-collar crime (in terms of prosecution) in history. [1] http://billmoyers.com/2013/09/17/hundreds-of-wall-street-execs-went-to-prison-during-the-last-fraud-fueled-bank-crisis/ http://billmoyers.com/2013/09/17/hundreds-of-wall-street-exe...

pb8226 12y ago

Someone other than the current politicians need to be in office for this to result in any serious consequences for the banks. The banks have bought the politicians in the U.S.

chaostheory 12y ago
The problem is that no one chooses an alternative candidate who doesn't belong to one of the major two parties. Moreover all of the money is being funneled into those two parties.
- pb8226 12y ago
  Yep, my otherwise intelligent coworkers insist on voting Democrat or Republican. Kinda depressing.
  - JoeAltmaier 12y ago
    ...because they might win? Its a two-party system like it or not.
    - dragonwriter 12y ago
      Well, if you don't like it, you could work to fix it -- which, at the state level in states that have provisions for citizen ballot initiative, doesn't even rely on gaining support from those elected under the present electoral system.
    - thuuuomas 12y ago
      Regardless of the letter beside the person's name, money talks & shit walks. Either party (nationally, on the whole) could truthfully be described as "Centrist-Corporatist".
      - dragonwriter 12y ago
        I think its probably more accurate to say that one is Center-Right/Corporatist and the other is Far-Right/Corporatist.

steven2012 12y ago

The fact that this has been going on sickens me. The entire US infrastructure is corrupt (actually probably the entire world's infrastructure). There was the article a few weeks ago about how the Federal Reserve was in bed with the likes of Goldman Sachs, and a whistleblower came out and still nothing was done. But what do we do as a generation of people that don't want this? The closest thing to come was Occupy Wall Street, but that fizzled out. Is there a way to organize ourselves and vote in blocks to get rid of these current politicians and elect a new generation that hopefully isn't as corrupt? Yes, I know, it's a pipe dream.

nutschig 12y ago
Exit the financial system. Use Bitcoin.
- cmapes 12y ago
  Not realistic if you run a business that actually operates in the real world.
  - Andrew_Quentin 12y ago
    I'm not sure what you mean exactly. Rome was not built in one day, but with small steps. If you wish change then you take small actions that of course do not build a palace today, but might do in 10 years. That basically translates to use bitcoins alongside dollars and slowly transition to bitcoins only.
    - dd36 12y ago
      Why are bitcoins a solution to a corrupt criminal justice system?
      - throwaway344 12y ago
        Yeah, I've never understood the logic that using Bitcoins insulates someone to the normal financial system. If you want a loan, put money in a bank account, or hedger risk, or do anything with your money that isn't just moving it from address to address, it is still needed to have banks. Or have cryptocurrency fans figured out a solution that I can't think of now.

bradleyjg 12y ago

I'm actually somewhat sympathetic to the DoJ's argument regarding criminal convictions of the banks. The concept of corporate criminal conduct is somewhat problematic, and the collateral consequences of conviction can be dire for innocent third parties. But there is absolutely no justification for their sheer and utter lack of diligence in pursuing criminal cases against individuals. Holder, Breuer, Bharara and those who worked with them ought to be ashamed of themselves.

mbreese 12y ago
One solution is to extend the "corporations are people too" concept to the logical conclusion. It's just harder to jail a corporation aside from fines. A corporate death penalty would be nice to see for some of the most egregious cases, including a "show-cause" requirement to allow executives to take leadership positions in another public company or one in a regulated industry. This is fraught with problems though... you could kill the corporation, shame the executives, but tens of thousands could still be out of a job, and in the financial industry you'd wreak havoc on the entire economy. I'm not sure if it is worth the risk. Realistically, I'm not optimistic that this will ever happen in a meaningful way...
- tracker1 12y ago
  Eliminate corporate taxes, and corporate personhood as legal concepts, establish non-living entities as a legal class without certain rights (unable to donate to political campaigns). Limit unused and under-used assets a corporation can own (If a company owns property it doesn't use, or has an excess of liquid assets they are ceased by the govt). Do those things, and a lot of the rest would sort itself out. Companies would need to constantly grow (Amazon) or downsize to their actual value-add (Banks).

omgitstom 12y ago

Unfortunately, we can't do anything to fix the past. It is clear that there was a cover up. The number of banking execs that have gone to jail can be rounded down to zero. I wish our politicians / president would grow a pair and do what is best for the American public and break up the big banks and remove them from political donations / lobbying.

seanv 12y ago

i remember hearing about the settlement on the radio and was like Great! At least some investors will get compensated for being scammed... then I read this: "Couple this with the fact that the bank's share price soared six percent on news of the settlement, adding more than $12 billion in value to shareholders, and one could argue Chase actually made money from the deal. What's more, to defray the cost of this and other fines, Chase last year laid off 7,500 lower-level employees. Meanwhile, per-employee compensation for everyone else rose four percent, to $122,653. But no one made out better than Dimon. The board awarded a 74 percent raise to the man who oversaw the biggest regulatory penalty ever, upping his compensation package to about $20 million." Just amazing

berberous 12y ago
Taking a 6% pop as evidence Chase made money from the deal is ridiculous. I'm not going to waste time pulling up charts of their share price, but if I had to bet, their shares were depressed while the overhang of legal liability remained. For example, the price could have been down over 6% due to news of the possible liability, and then popped back 6% when settled. So they would have lost on the deal.
- dd36 12y ago
  Presumably the top executives own lots of stock. Thus, getting a criminal probe squashed directly benefits their pocketbooks. I assume that's the thinking.

shkkmo 12y ago

Is there any way Holder and the people that orchestrated the cover up can be charged with corruption and negligence? I'm all for criminal consequences for the bank executives, but it sounds like we also need criminal consequences for coverups by the DOJ.

bmmayer1 12y ago

This is basically a perfect example of how "capitalism" in the US is not capitalism anymore. No corporation should be insulated from the financial downside of its incompetence. In the real world, Chase should have gone under or at least lost a hundred billion in market cap, but instead they are in cahoots with government regulators to limit their downside and protect their upside from what is their fault. This is not capitalism! And it's painful to see how this hybrid growth-corporatist model trump true innovation and economic progress. It's an insult to free market economics and democracy at the same time. Rant over. One addendum: jail time isn't the answer. Putting an executive in a minimum security prison for 5 years just lets another one take his place. CEOs aren't afraid of jail time, they're afraid of losing money. If you let banks fail who deserve it then creative destruction will ensure stronger, better and safer banks in the future. Capitalism can't survive without profit and loss working hand in hand.

Sherlock 12y ago
When banks go down they take down the economy with them; that's what 'too big to fail' means. It's not worth all the human suffering caused by a depression instead of a recession just to prove that the banks should be more cautious.
- nulltype 12y ago
  Then don't allow large banks.
  - josefresco 12y ago
    Cat's already out of that bag on that one. The issue now is regulation and passing laws to control and reign in power on those large banks. Unfortunately the public doesn't get excited about passing complicated financial regulations.
    - Andrew_Quentin 12y ago
      And if you can't punish them for breaching those regulations what worth are they?

pjungwir 12y ago

I hate the idea of giving these banks special treatment to keep them solvent, but if that's really necessary, fine. But there's no reason we can't lock up all the executives and fine them personally.

javajosh 12y ago
Yes, this is an important point: bailouts and jail time are not mutually exclusive.
josefresco 12y ago
I agree. Now that the world's focus is on other topics, the feds should have kept a list of names and came down hard on those responsible. During the crisis prosecution would have been risky, but now that the world has moved on (slightly) I don't believe it would rock investors to see some executives go down and admit major fault.

dmunoz 12y ago

Slightly off-topic, but I missed this from last week: the author of this piece, Matt Taibbi, has departed with First Look media. I wonder if he is back at Rolling Stone for good, or just sold this piece to them. There are two interesting notes on the matter. One, the notice of departure [0], and then a longer piece on "The Inside Story Of Matt Taibbi's Departure From First Look Media" [1]. The second links contains some interesting snippets: "Taibbi’s dispute with his bosses instead centered on differences in management style and the extent to which First Look would influence the organizational and corporate aspects of his role as editor-in-chief. Those conflicts were rooted in a larger and more fundamental culture clash that has plagued the project from the start: A collision between the First Look executives, who by and large come from a highly structured Silicon Valley corporate environment, and the fiercely independent journalists who view corporate cultures and management-speak with disdain." It also notes that The Intercept had similar problems while launching. I also found it interesting that this is the first time I have actually heard what Taibbi was trying to do with First Look: "His vision was a hard-hitting, satirical magazine in the style of the old Spy that would employ Taibbi’s facility for merciless ridicule, humor, and parody to attack Wall Street and the corporate world." [0] https://firstlook.org/2014/10/28/important-announcement/ https://firstlook.org/2014/10/28/important-announcement/ [1] https://firstlook.org/theintercept/2014/10/30/inside-story-matt-taibbis-departure-first-look-media/ https://firstlook.org/theintercept/2014/10/30/inside-story-m... Edit: Happened upon some additional details about the conflict at NYMag [2]: "Over the last year, however, the center of gravity of the organization has shifted, as Omidyar and his Silicon Valley braintrust have exerted control over budgets and vacillated over the journalistic mission. Over the summer, Omidyar appointed a longtime confidante, John Temple — a former newspaper editor who previously led an Omidyar-financed civic journalism venture in Hawaii — to be the president for audience and products, putting him in a position above Eric Bates, the former Rolling Stone editor who was brought on as a First Look editorial director, who is close to Taibbi." [2] http://nymag.com/daily/intelligencer/2014/10/matt-taibbi-disappears-from-omidyars-first-look.html http://nymag.com/daily/intelligencer/2014/10/matt-taibbi-dis...

bostik 12y ago
I'm (again) badly torn. When Taibbi left for First Look, he was forced to delay publication of any of his pending articles. I knew something big was brewing, but I also had great expectations for FLM. Then, nothing happened. FLM kept announcing new hires, Taibbi was supposedly neck-deep in admin, and the article never materialised. Now, with just two weeks after his departure from FLM, we are blessed with a heavy-hitting Taibbi piece from Rolling Stone. So I'm torn, because on one hand I'm personally delighted to have Taibbi writing again. But on the other hand I'm genuinely worried about FLM's future direction. From your comment I have to assume the worry is not unwarranted.

pb8226 12y ago

Summary from ZeroHedge: http://www.zerohedge.com/news/2014-11-07/why-matt-taibbi-thinks-woman-jpmorgans-worst-nightmare http://www.zerohedge.com/news/2014-11-07/why-matt-taibbi-thi...

KaoruAoiShiho 12y ago

To me it seems like the bug in the system is the arrangement between the prosecutor and Chase to fake prosecuting criminal charges after settling the civil suit. That's willful deception of the American people and should be illegal. If you fix this it seems like this would end satisfactorily.

AnimalMuppet 12y ago

It's not as bad as it could be. JPMorgan spent 9 billion dollars to keep her off the witness stand. But it seems that they never seriously tried to kill her. Note well: I am not advocating murder! It's just that, since things didn't go that way, things aren't yet as bad as the most cynical of us assume they are.

cjslep 12y ago
> It's not as bad as it could be. JPMorgan spent 9 billion dollars to keep her off the witness stand. ...but they didn't really spend 9 billion if you read the article: For starters, $4 billion of the settlement was largely an accounting falsehood, a chunk of bogus "consumer relief" added to make the payoff look bigger. What the public never grasped about these consumer--relief deals is that the "relief" is often not paid by the bank [...] but by the bank's other victims Moreover, in this case, a fine-print addendum indicated that this consumer relief would be allowed only if said investors agreed to it – or if it would have been granted anyway under existing arrangements. [...] The average person had no way of knowing what a terrible deal the Chase settlement was for the country. The terms were even lighter than the slap-on-the-wrist formula that allowed Wall Street banks to "neither admit nor deny" wrongdoing – the deals that had helped spark the Occupy protests. EDIT: And, to add insult to injury: Because most of the settlement monies were specifically not called fines or penalties, Chase was allowed to treat some $7 billion of the settlement as a tax write-off. Couple this with the fact that the bank's share price soared six percent on news of the settlement, adding more than $12 billion in value to shareholders, and one could argue Chase actually made money from the deal. I would argue that it is much worse than you initially imagined.
tim333 12y ago
>they never seriously tried to kill her. Yeah they are not as bad as Russia. They could still aim higher though. Transparency International has the US at 73/100 on it's corruption index, ranking no 17. Denmark and New Zealand are the leaders at 91/100. Come on USA, you can improve! http://files.transparency.org/content/download/700/3007/file/2013_CPIBrochure_EN.pdf http://files.transparency.org/content/download/700/3007/file...

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jokoon 12y ago

I really wouldn't want to be in Holder's shoes. I really wonder how he managed to get to this. I don't understand what kind of discussions holder and dimon had, but all I can really understand is that they're only human. After all, all of this boiled to 2 sides negotiating like in a classic political game, and one side won, and I don't know if the good side really won... I just pity Holder for mismanaging this. Or maybe there are more horrific details we haven't heard of yet. I don't know which one is the more frightening. One only thing, it's now more than 6 years that all of this happened, and it doesn't seem really over.

winstonsmith 12y ago
>I just pity Holder for mismanaging this. Or maybe there are more horrific details we haven't heard of yet. Your pity would be misplaced; there are horrific details. A large part of the problem is that there is a revolving door between the DOJ and the law firms that represent financial firms (likewise for the SEC). Holder was assistant AG in Clinton's DOJ, then he moved to the law firm Covington and Burling where he represented the bank UBS among other clients, now he's back at the DOJ, and soon he will likely move back to the private sector where he will be handsomely rewarded for his service to the finance industry while AG. The big picture is that the Obama administration is to Finance as the Bush administration was to Oil, but for horrific details about Obama's economic team, read this: http://www.vice.com/en_uk/read/larry-summers-and-the-secret-end-game-memo http://www.vice.com/en_uk/read/larry-summers-and-the-secret-... .

pasbesoin 12y ago

I happened to click (TV remote) into the latter part of an interview with her on Amy Goodman's program, "Democracy Now". One of the local PBS stations has started carrying that program, recently. After a few recent, similar surprises with it -- each one keeping me glued to it despite the late hour, until the end -- I've made a mental note to start catching it regularly. As I've said before with respect to this fiasco and the Administration as well and Congress' response, as a mantra: No jail? You fail. I recall an interview with one of the lead investigator's/prosecutors during the 1980's Savings and Loan (aka S&L) scandal. Someone really in a position to know. He expressed similar disappointment, and more so he described in detail how things could have been done differently. I also recall comments around or shortly after the peak of the recent crisis, from Sheila Bair as well as Elizabeth Warren. Particularly from Bair -- as I recall it, roughly: Too big to fail be damned. She/they were ready to take those banks into receivership, if the political leadership would only give the go ahead. And no common account holder/investor need lose their shirt as a result of that process. Market panic might have been another matter. But I think, now, that that would have been a lesser cost than the one we will now end up, as a society -- or rather, multiple societies -- paying. As far as I'm concerned, no statute of limitation should apply to the crimes surrounding these events. Particularly to the perversion of justice that has initially gotten these blackguards off the hook. Law is a social convention, and they have so flouted social convention, that I for my part no longer deign to extend it to them. Like barbarians they acted? Well, let them so be treated.

tim333 12y ago

You can see 'em on video on Democracy Now! - "Bank Whistleblower Alayne Fleischmann & Matt Taibbi on How JPMorgan Chase Helped Wreck the Economy" http://www.democracynow.org/2014/11/7/matt_taibbi_and_bank_whistleblower_on http://www.democracynow.org/2014/11/7/matt_taibbi_and_bank_w...