FacebookTwitterGoogle+RedditEmail

The Charmed Life of a Big Time Bankster

by CHRISTOPHER BRAUCHLI

It’s been a really great year for Jamie Dimon.  As folks who follow such things know, he’s the chairman of the board of JPMorgan Chase and the chief executive officer of the bank. He almost wasn’t.  In May the bank held its annual meeting in Tampa Florida and there was some thought that shareholders might think that Mr. Dimon should not hold both positions.  The majority of the shareholders didn’t agree.  He kept both positions.  When a similar proposal was before the shareholders in 2012, 40% of the shareholders voted to split up the job.  In 2013 that number dropped to 32%.   Mr. Dimon owed his retention to what is widely viewed as his success at navigating the financial crisis of the last few years that felled many a lesser giant.  It was also a great year for Mr. Dimon because some of what appeared to be problems were set aside.

In July 2013 the bank settled the Electricity-Market case.   The case arose out of allegations that the bank’s Houston-based electricity-trading desk made $125 million in unjust profits out of its activities in California and Midwest electricity markets during the preceding two years.  The settlement was the result of an enforcement order entered by the Federal Energy Regulatory Commission.  As part of the settlement the bank admitted no wrongdoing.  (In those kinds of settlements the people paying the big bucks usually decline to admit to any wrongdoing.  They just pay to make the problem go away.)  In this case the bank’s non-wrongdoing ended with it paying $410 million dollars.  Of that amount, $285 million was a fine and the rest was disgorgement of profits the non-inappropriate behavior generated.  For the bank that was nothing more than a drop in the bucket since it typically has net earnings in the billions of dollars.

Another non-problem for Mr. Dimon (although that may yet change) was the welcome news in August that although the bank was being investigated in China for its hiring practices in that country, it was not yet being charged with violating U.S. laws prohibiting bribery. The China story suggested Morgan Chase officers working in China may have hired children of powerful Chinese officials in order to curry favor with officials who were in a position to, and did, award lucrative contracts to the bank. Whether the actions of the bank in hiring relatives of those in a position to bestow business on the bank were violations of the anti-bribery laws in the U.S. time will almost certainly tell us.

On September 19, 2013, the bank got welcome news that another matter that had been vexing it for some time had finally been resolved.  On that date it was announced that the bank had settled a matter with the Consumer Financial Protection Bureau by agreeing to pay a $309 million fine for defrauding customers.  As a result of the settlement we learned that the bank was billing customers for services it wasn’t providing.  In addition to agreeing to pay the fine, it also agreed to give refunds to the customers it had cheated.  And as if getting that bit of unpleasantness behind it wasn’t enough for one day, that day brought another piece of good news for the bank.  The bank had brought to an end, at least in part, another troublesome matter.

Since May 2012 the bank has been dealing with investigations arising out of the activities of one of its star traders in London known as “the whale.”  As a result of the whale’s trading activities the bank suffered $6 billion in losses. The losses triggered charges against the bank by assorted regulatory agencies.  As a result of the settlement that was announced, the bank will pay the Federal Reserve $200 million for what is described as “deficiencies in risk management.”  It will pay $300 million to the Office of the Comptroller of the Currency, $200 million to the Securities and Exchange Commission and $220 million to the United Kingdom’s Financial Conduct Authority, for a total of $920 million.  The fines were not the only punishment imposed on the bank. In an unusual part of such settlements, this particular settlement will reportedly include an admission of wrongdoing by the bank although as of this writing it is unclear how comprehensive such a confession will be.  Time will tell.

When news of the London Whale’s activities became public, Mr. Dimon reportedly said that the entire matter was nothing more than a “tempest in a teapot.”  Since he was both the chief executive officer and chairman of the board he was in a position to know and, therefore, his comments were reassuring.  They were also wrong.  He now accepts responsibility for the teapot which, it turns out, was destroyed by the tempest.  So was his reputation, sort of.  He is still chairman of the board and chief executive of the bank.  He still has an annual salary of $1.5 million in cash and $10 million in stock. He still has the confidence and respect of people who matter.  Not people like me.

Christopher Brauchli is a lawyer living in Boulder, Colorado. He can be emailed at brauchli.56@post.harvard.edu.

 

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

February 20, 2017
Jordan Flaherty
Best Films of 2016: Black Excellence Versus White Mediocrity
Weekend Edition
February 17, 2017
Friday - Sunday
David Price
Rogue Elephant Rising: The CIA as Kingslayer
Matthew Stevenson
Is Trump the Worst President Ever?
Jeffrey St. Clair
Roaming Charges: Tinker, Tailor, Soldier, Flynn?
John Wight
Brexit and Trump: Why Right is Not the New Left
Diana Johnstone
France: Another Ghastly Presidential Election Campaign; the Deep State Rises to the Surface
Neve Gordon
Trump’s One-State Option
Roger Harris
Emperor Trump Has No Clothes: Time to Organize!
Joan Roelofs
What Else is Wrong with Globalization
Andrew Levine
Why Trump’s Muslim Travel Ban?
Mike Whitney
Blood in the Water: the Trump Revolution Ends in a Whimper
Vijay Prashad
Trump, Turmoil and Resistance
Ron Jacobs
U.S. Imperial War Personified
David Swanson
Can the Climate Survive Adherence to War and Partisanship?
Andre Vltchek
Governor of Jakarta: Get Re-elected or Die!
Patrick Cockburn
The Coming Destruction of Mosul
Norman Pollack
Self-Devouring Reaction: Governmental Impasse
Steve Horn
What Do a Louisiana Pipeline Explosion and Dakota Access Pipeline Have in Common? Phillips 66
Brian Saady
Why Corporations are Too Big to Jail in the Drug War
Graham Peebles
Ethiopia: Peaceful Protest to Armed Uprising
Luke Meyer
The Case of Tony: Inside a Lifer Hearing
Binoy Kampmark
Adolf, The Donald and History
Robert Koehler
The Great American Awakening
Murray Dobbin
Canadians at Odds With Their Government on Israel
Fariborz Saremi
A Whole New World?
Joyce Nelson
Japan’s Abe, Trump & Illegal Leaks
Christopher Brauchli
Trump 1, Tillerson 0
Yves Engler
Is This Hate Speech?
Dan Bacher
Trump Administration Exempts Three CA Oil Fields From Water Protection Rule at Jerry Brown’s Request
Richard Klin
Solid Gold
Melissa Garriga
Anti-Abortion and Anti-Fascist Movements: More in Common Than Meets the Eye
Thomas Knapp
The Absurd Consequences of a “Right to Privacy”
W. T. Whitney
The Fate of Prisoner Simón Trinidad, as Seen by His U. S. Lawyer
Brian Platt
Don’t Just Oppose ICE Raids, Tear Down the Whole Racist Immigration Enforcement Regime
Paul Cantor
Refugee: the Compassionate Mind of Egon Schwartz
Norman Richmond
The Black Radical Tradition in Canada
Barton Kunstler
Rallying Against the Totalitarian Specter
Judith Deutsch
Militarism:  Revolutionary Mothering and Rosie the Riveter
Nyla Ali Khan
Kashmir Evoked a Lot More International Attention in the 1950s Than It Does Now
Adam Phillips
There Isn’t Any There There
Louis Proyect
Steinbeck’s Red Devils
Randy Shields
Left Coast Date: the Dating Site for the ORWACA Tribe
Charles R. Larson
Review: Bill Hayes’ “Insomniac City”
David Yearsley
White Supremacy and Music Theory
February 16, 2017
Peter Gaffney
The Rage of Caliban: Identity Politics, the Travel Ban, and the Shifting Ideological Framework of the Resistance
FacebookTwitterGoogle+RedditEmail