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Monday, October 24, 2016

Oct. 21 (Bloomberg) — A new injustice plagues the land, at least according to people who take the side of JPMorgan Chase & Co. and its chief executive officer, Jamie Dimon, after the bank’s tentative agreement to pay a record $13 billion to end civil claims related to its sales of mortgage bonds. The bank and its leader are now — it is claimed — subject to Politically Motivated Prosecution.

This is pointless whining, for three reasons.

First, when pressed, advocates for big banks readily concede that “no one is above the law.” What else can they say in a democracy? When Attorney General Eric Holder and his criminal division chief at the time, Lanny Breuer, suggested last year that very large companies were too big to prosecute, there was even some feeling of embarrassment in the big bank camp -– as well as a great deal of pressure on Holder to walk back his congressional testimony on this point.

Now that charges have been brought and a settlement is almost signed, Dimon’s allies can’t stop complaining.

So no one is above the law, but no charges should be brought? Dimon’s camp wants regulation and law enforcement by lip service, which would just be an invitation to further lawless behavior.

Second, JPMorgan is the largest U.S. bank, and one of the most powerful politically. Dimon met with the attorney general to discuss the charges in September. (He spoke again with Holder at the end of last week.) Most people don’t get such an opportunity — in fact, the Justice Department can’t remember the last time a CEO had this kind of access.

The Supreme Court isn’t known to be anti-business. If there is anything unreasonable or unjustified in the charges, JPMorgan should fight them all the way up.

To suggest that JPMorgan has no legal recourse is to completely misrepresent the way the legal and political systems work. JPMorgan makes big political donations and has powerful protectors in Congress. The bank employs some of the best lawyers, too.

Third, JPMorgan bears responsibility in two ways: the actions by companies it bought (Washington Mutual Inc. and Bear Stearns Cos.) and the actions by JPMorgan itself.

If buying a company could absolve that entity and its employees of all sins, imagine the merger wave we would have.

As Peter Eavis wrote in the New York Times, JPMorgan’s executives knew what they were buying, and expected the kind of legal problems that materialized. After the Washington Mutual deal closed, Dimon said, “There are always uncertainties in deals,” and “our eyes are not closed on this one.”

Assets at both Bear Stearns and Washington Mutual were — justifiably — sharply marked down upon acquisition, presumably to reflect mortgage-related issues.

Blaming the government is a way of saying crisis management by merger isn’t a good idea; creating the largest U.S. bank in this fashion wasn’t such a smart idea for anyone. But at the time, Dimon was keen to make a deal, including one with Federal Reserve financing, in the case of Bear Stearns.

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  • Bryan Blake

    What Simon Johnson’s article clearly illustrates is that there are most definitely two criminal justice systems in this country. The rich, ultra-rich and mega corporations can wallow in common criminality with impunity. Not only can they commit massive crimes but also, even if they pay a fine, reap immense profits on their very acts. I continue to find it an injustice that none of these world class, but still common, criminals have yet to see the inside of a jail cell! Even for a short time to post bail!

    Perhaps, if Jamie Dimon spent just a token amount of time in his New York’s Riker’s Island, in his beneficence he would remodel the facility. Of course, he would probably want it renamed Dimon’s Island and turn it into a country club facility.

    • Allan Richardson

      O. J. Simpson proved that our justice system is LESS race biased than it used to be, so that a RICH BLACK killer (even of white victims) can get off as easliy as a RICH WHITE killer. Of course, POOR black kids can get shot dead, then posthumously convicted in the media as thugs about to attack.

      • Bryan Blake

        I think Simpson was just an anomaly generated by his fame and his veneration in our society as a “football god”. Such men who rise to the top of the game are given “social privileges” that sets them apart from other males. Here in Texas, football is the National Religion. During football season Friday night high school games are attended with the same fervor and faithfulness as that a religious extremist brings to church services. Despite SCOTUS decisions and other laws 99.99% of the games are started with prayer. In fact football fans and religious extremists are virtually interchangeable. Furthermore, football is the only place in Texas society where ability will displace the inherent racism found in our state – at least for four quarters in the Nirvana of Testosterone.

        Simpson’s acquittal probably did just the opposite as far as the race of an alleged murder is concerned. His acquittal brought to the surface a lot of the racial animosity and fear that exists toward African-American males. Virtually all of the white people I knew saw his acquittal as jury nullification – although the great majority did not know of the term nor its definition.

        In my opinion, African-American males continue to become an increasingly oppressed minority as the targeted “others” of the American criminal justice system.

  • tiredofitall

    I am tired of civil penalties and the corporations paying the fines. I want the guys who broke the laws to go to jail.

    • Dominick Vila

      They also inflicted tremendous pain on millions of Americans when they contributed to the near collapse of our economy. Yes, they should spend the rest of their days in a maximum security prison without parole.

      • Jim Myers

        Yes. Not in a Country Club paid for by the taxpayers.

    • sigrid28

      If they can’t be put in jail, can they at least get control of the GOP congressmen whose campaigns they underwrote?

      • CPAinNewYork

        You’ve got it backwards. The members of Congress act as they do because they’ve doing what the bankers and other money boys tell them to. There will never be any “riding herd” to make things more moral.

        • sigrid28

          Better catch up, CPA. Wall Street campaign donors caught on a little late during the government shutdown. They only realized that the guys THEY paid to get elected were unwilling to do their bidding and had been intimidated by the guys from the Tea Party who got elected by the Koch brothers. The Tea Party members did exactly what their donors asked, while benefactors to conservative Republicans in the House found that their representatives had gone rogue–or just chickened out.

    • Bill Thompson

      Let me tell you a little story about the pain and suffering these companies and corporations are capable of inflicting. Just before the financial meltdown I work as a project manager for a sheet-metal company in Manhattan we did approximately $22-$28 million gross a year. We worked with a profit margin of 5 to 12% at most. We were just finishing up a project with Lehman Brothers who was spending money like drunken sailors. Please note in the construction industry you do not get dime one for hundred and 120 days sometimes as much as 180 days. In essence you bankrolling their project. J.P. Morgan Chase was doing a massive overhaul of their offices approximately 25 floors. The floors were broken up into infrastructure and then 4 to 5 floors at a pop. The timeline for each phase was to be 4 to 5 months. Bidding was fierce and profits were slim. We won the first bid which was the executive offices, kitchen and dining room. Our part of the project was at $650,000. In the midst of the project the financial collapse occurred J.P. Morgan Chase bought Bear Sterns. The timeline on the project for the executive offices was cut by six weeks we were told to work unlimited overtime both in the shop and in the field. We were told to price a proceed with the work PO’s were to follow. We racked up approximately hundred and $150,000 in extras for a company like ours this was huge. We finished the project including Jamie Diamond’s office in the timeline that was allotted to us they moved in and when we try to get paid for the extras, they wanted to negotiate for pennies on the dollar. When the owner of the company complained we were told to sue them. The loss of the extras and the loss of the leman Brothers project monies was a deathblow to a company that had been in business for over 20 years. The company filed for Chapter 11 and we went from employing 120 men down to 20. At the end of the JP Morgan Chase project. when other floors came out to bid they hired a new project manager and all new subs and did the same thing that they did to our company to the next group of contractors. At the end of the Mayhem Lay in ruins many top quality contractors that had been in business for 20 years and more. Yes I think a lot of these people should be in jail.

      • CPAinNewYork

        I’m with you, Mr. Thompson. JPMorgan is a Chase bank run by the Rockefellers. John P. Rockefeller was one of the leading “Robber Barons,” the “Malefactors of Great Wealth,” as Theodore Roosevelt characterized them.
        I believe that they should be in jail, but I feel sure that will not happen to them: Obama doesn’t have the will to do it and Holder comes from a law firm that services the big banks and investment houses. When his stint as Attorney general is over, he’ll go right back to that area, if not the exact same organization.

        There is probably only one solution: revolution.

        • Who has, politically, done something against these robber barons, other than FDR, that is? Our economy is designed for these bastards to do it is they actually do, which I assume has to do with more than moving money around and ostentatious wealth.

          That being said, we had a revolution in this country before, which actually laid the groundwork for where we are now.

          And revolution, despite what you write, will lead to a similar place.

          How do I know?

          Do you think our Founding Fathers intended for our government to put the needs of the rich and powerful above all others? Maybe not, though since they were hardly paupers — and that’s not even forgetting that it was a ‘white males’ only club — can you really be shocked we’ve reached this point?

          Which points to the weakness of the while revolution idea: Someone has to run things. Someone has to give orders.

          So how much do you want to bet, if you were in charge, you would favor your family (no matter how large or extended), and probably want to work around people who look more like you than someone else.

        • midway54

          Absolutely correct, and today’s Gilded Age II Plutocracy and its schemers and plunderers keep me ever mindful of the fact that throughout our history they have been there; and I especially focus in my recollection on both TR and FDR who were forced to endure their presence and who did something about them, which was difficult because the SCOTUS’ jurisprudence was mostly in sympathy with them say from 1877 to 1937. Be it remembered as well that TR, after having refused a third term opportunity, anointed Taft as he successor, and saw Taft as president jump into bed with the trusts and corporations. Out of retirement came TR asserting that he was fit as a bull moose to run and then was nominated on the Progressive Party ticket in 1912. Wilson won, TR came in second and a sitting president came in third! In my opinion Taft’s humiliation was well-deserved.

  • 4sanity4all

    Thugs always whine when they get caught. I only wish that all of these greedy criminals had to do time, as well as pay a fine. I further wish that the fines would be huge, and would restore the money to the many who lost their investments and houses because of these criminal’s actions.

    • disqus_ivSI3ByGmh

      What disgusts me about this is they whine that nobody was prosecuted before for stuff like this. Guess they don’t remember their history when Theodore Roosevelt broke the back of the giant cartels. It took them until the Franklin Roosevelt administration to get some of their bite back.

  • disqus_ivSI3ByGmh

    JP Morgan has always believed it was above the law. Even when John Pierpoint Morgan was alive, his personal lawyer was a Supreme Court Justice who used to advise him how he could legally do what was blatantly illegal!

  • JDavidS

    Dimon is the sleaziest prick to ever draw a breath. About three rungs below a used car salesman. He has absolutely no conscience and simply couldn’t care less about who he screws or the damage he does…he is greed personified. His part in almost bringing the economy to total collapse and the people he hurt should be enough to merit this asshole spending his remaining days in prison.

  • Eleanore Whitaker

    Right now, the government is deeply in need of the money from those fines. A pragmatic leader knows that it’s unlikely JP Morgan will ever admit in a court of law among they are responsible for fraud. That could come later and leave the door open to those JP Morgan bilked in a civil lawsuit.

    I also believe these thugs should go to jail. That whine that there isn’t a jury of their peers who understand the kind of “business” these guys engaged in is pure BS. When you are one of their victims, you do indeed understand the manipulation of other peoples’ money. All that slicky slicky double talk they use is a foil for their fraud.

    This is why no matter what else happens, if you are handed a document you don’t understand, make them rewrite it in language you, not exclusively they, understand.

  • CPAinNewYork

    Jamie Dimon is the rich SOB that I hate most of all. His smarmy self-assured expression when confronted with his bank’s crimes reminds me of Thomas Nast’s cartoon of “Boss” Tweed, with the caption “What are you going to do about it?”
    That cartoon appeared in the Times just before Tweed’s fall. Hopefully, Jamie Dimon will fall….into jail…. as Boss Tweed did.

  • highpckts

    How about jail time? Sound good? It sure does to me!!!

  • browninghipower

    Steal loaf of bread, go to jail..steal a third one, go to jail for life. Steal a billion dollars and they make you CEO of JP Morgan Chase. Il love America…not! What a pile of privileged White Man BS. Oh how I sometimes long for the days of the know the thing that severed heads from bodies. 🙂

    • Allan Richardson

      Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world.

    • nirodha

      How does the Bob Dylan line go…
      “Steal a little and they put you in jail
      Steal a lot and they make you king”

  • IS THIS what we were waiting for?”The economy is too fragile for the Federal Reserve to touch,” Sung Won Sohn, an economist at California State University, said. “The shenanigans in Congress have hurt confidence and increased uncertainties, most likely hurting both consumer and business spending as well as hiring.”

    Job growth has fallen sharply in the past three months after a promising start this year. The economy has added an average of 143,000 jobs a month from July through September. That’s down from the 182,000 average gain during from April through June and well below the 207,000-a-month pace from January through March. I thank you FirozaliA.Mulla DBA

  • DennisRL

    I don’t usually want to defend a big bank. But even though I’m sure JPMorgan is not entirely guiltless in all of this, I think there were other banks that the Justice dept should have gone after before them. JPMorgan did a favor to the government by buying Washington Mutual and Bear Stearns and keeping them from going belly up and causing even more of a catastrophe during the 2008-2009 meltdown. So despite what someone said about Holder working for a wall street law firm, I believe this is partly a vendetta against Jamie Dimon.

  • OakenTruncheon

    Unable to assert innocence, the apologist stipulates to a lesser evil, and pleads ignorance, and/or circumstances beyond the realm of reasonable competence, and follows up, apparently as a bonus, with a pointless affectation of naivete’.

    “Did Dimon and his colleagues break the law on purpose? Presumably not; otherwise, the board of directors surely would have made a change by now.”


  • OakenTruncheon

    “Boys will be boys. Dear me, what will those scamps do next?”