Criminal -- JP Morgan Since the Summer of this year, it has been clear that JPMorgan was fighting for its survival. The biggest threat to this British-pedigreed bank, with the largest bulk of derivatives of any money-center bank, is the momentum for Glass-Steagall. With a popular groundswell reflected in the 24 states then considering memorials, and the introduction of two bills in the U.S. Senate, to complement one in the House, CEO Jamie Dimon and his flunkies had to face the real danger that Glass-Steagall would soon put an end to their life of financial crime. Flunkies from the bank and the ABA began to appear in state capitals, conventions, and other venues around the nation—to insist that, above all, Glass-Steagall be stopped. The highest profile of these visits was by the delegation of 12 top Wall Street bankers to the Oval Office on Oct. 2, where they delivered the message to Obama to kill Glass-Steagall. But Jamie Dimon faced another major problem: the mass of investigations by state and Federal authorities for its malfeasance leading into the 2007-08 blowout. Dimon’s problem was not with the Obama Administration. Indeed, Obama’s Attorney General Eric Holder had already openly declared the “Holder doctrine,” by which the Administration foreswore any prosecutions against banks which might threaten the “financial system” itself. But Holder and Obama were under enormous pressure to show that they were “doing something,” and that the investigations in New York and California, among others, were not going away. On Sept. 26, Dimon had gone to Washington for a high-level negotiating session with Holder, to try to make a deal. Rumors swirled that the bank would get away with a $13 billion settlement, which, after tax deductions, would amount to a mere $6 billion. Even more scandalous, as former S&L regulator William Black has pointed out, was that such a deal would amount to a settlement that would apparently let the bank off scot-free on eight of the nine areas of fraud that it was accused of. Dimon, whom Barack Obama has repeatedly praised as one of the nationùs most successful bankers, would, of course, stay out of jail. Still up in the air, then and now, is whether the bank would admit wrongdoing, and all state prosecutions would be ended. As former Security and Exchange Commission attorney Edward Siedle pointed out Oct. 28 in the Wall Street Journal, a criminal prosecution against JPMorgan Chase could bring down the whole system. JPMorgan Chase is, of course, actually bankrupt—as a withdrawal of Federal government support through reimposing Glass-Steagall would show. Its demise would be a boon for the real economy—the sooner, the better. (Nancy Spannaus)
Posted on: Sat, 09 Nov 2013 04:19:54 +0000
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