JP Morgan: Crime Pays

In one of those rare moments when the Huffington Post takes a break from reporting Justin Bieber’s antics, or the length of Selena Gomez’s shorts, HuffPo managed to report some actual news.  Well, it didn’t really report the news, because HuffPo doesn’t actually do reporting. HuffPo hires armies of individuals to read the news reported by other sites, and then recompile that news into graphics that are useful, as writer Mark Gongloff notes

The Daily Beast recently did the hard legwork of compiling all of these settlements into one helpful post, and I have spent countless seconds taking the Daily Beast’s hard work and turning it into an infographic that might help you visualize just how many of these things there have been so far. You’re welcome, America. 

Yes, it’s hard work to take another writer’s hard work and make an infographic, and America should thank Mark Gongloff.  After all, he didn’t build that. No, he actually didn’t do the reporting or the legwork. He made a graphic.  Here it is: 

Financial analyst Joshua Rosner estimated that JP Morgan had to set aside $16 billion in all to deal with litigation related to its shenanigans, which include the following: 

  • Overcharging or wrongfully foreclosing on military personnel. 
  • Rigging the bidding process for bond reinvestments, thereby costing 31 state governments (and their taxpayers) a great deal of money.
  • Conducting transactions with people in terrorist states like Iran and Sudan in violation of a Treasury Department sanction order. 
  • The state mortgage settlement, where JP Morgan paid over $5 billion to settle charges of “shoddy loan servicing, illegal robo-signing, and faulty foreclosure processing.” 
  • Processing checks by size rather than chronological order so that overdraft fees could be assessed.  
  • Misleading investors about the quality of mortgages underlying the mortgage backed securities it sold.  
  • Robo-signing and foreclosure abuses related to the Office of the Comptroller of the Currency’s investigation of JP Morgan and nine other banks. All told, the settlement came to $8.5 billion, and JP Morgan’s share of the settlement is unclear at this time.  
  • Transferred cash from MF Global before it collapsed. JP Morgan returned the $546 million to customers of MF Global in order to avert a threatened lawsuit.  

That’s what lawlessness looks like. Moreover, it’s what a lack of real enforcement looks like, because JP Morgan has figured out that breaking the law pays.  Screwing customers and investors over pays.  Its executives take home high bonuses for revenues booked on the backs of criminal transactions, and its shareholders get stuck with the fines later.  As Rosner puts it: 

JPMorgan’s financial filings, its “Task Force” investigation of losses in the CIO’s office and its recent history of significant regulatory failures demonstrate that shareholders are continuing to be called upon to pay for the firm’s inability to ensure an acceptable control environment.

JP Morgan understands business as usual means the following: we break the law, we get paid vast bonuses for breaking the law, and investors and shareholders pay the price.  No executive of JP Morgan ever goes to jail, or has their personal assets touched to satisfy the settlements listed above. No, shareholders get a reduced dividend, while most JP Morgan executives never have to forfeit bonuses related to the transactions in question. Customers get to fight against unlawful foreclosures, state governments get to sue in the aftermath of a rigged bidding process for their bond issuances, and those with checking accounts get to be screwed over by their own bank’s willingness to process checks out of order so that overdraft fees can be assessed.  

Crime pays at JP Morgan, and everybody else gets to pick up the tab. The real question is why JP Morgan is still in existence, given its record of disregard for the law.  



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