FacebookTwitterGoogle+RedditEmail

The Charmed Life of a Big Time Bankster

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:
April 23, 2018
Patrick Cockburn
In Middle East Wars It Pays to be Skeptical
Thomas Knapp
Just When You Thought “Russiagate” Couldn’t Get Any Sillier …
Gregory Barrett
The Moral Mask
Robert Hunziker
Chemical Madness!
David Swanson
Senator Tim Kaine’s Brief Run-In With the Law
Dave Lindorff
Starbucks Has a Racism Problem
Uri Avnery
The Great Day
Nyla Ali Khan
Girls Reduced to Being Repositories of Communal and Religious Identities in Kashmir
Ted Rall
Stop Letting Trump Distract You From Your Wants and Needs
Steve Klinger
The Cautionary Tale of Donald J. Trump
Kevin Zeese - Margaret Flowers
Conflict Over the Future of the Planet
Cesar Chelala
Gideon Levy: A Voice of Sanity from Israel
Weekend Edition
April 20, 2018
Friday - Sunday
Paul Street
Ruling Class Operatives Say the Darndest Things: On Devils Known and Not
Conn Hallinan
The Great Game Comes to Syria
Jeffrey St. Clair
Roaming Charges: Mother of War
Andrew Levine
“How Come?” Questions
Doug Noble
A Tale of Two Atrocities: Douma and Gaza
Kenneth Surin
The Blight of Ukania
Howard Lisnoff
How James Comey Became the Strange New Hero of the Liberals
William Blum
Anti-Empire Report: Unseen Persons
Lawrence Davidson
Missiles Over Damascus
Patrick Cockburn
The Plight of the Yazidi of Afrin
Pete Dolack
Fooled Again? Trump Trade Policy Elevates Corporate Power
Stan Cox
For Climate Mobilization, Look to 1960s Vietnam Before Turning to 1940s America
William Hawes
Global Weirding
Dan Glazebrook
World War is Still in the Cards
Nick Pemberton
In Defense of Cardi B: Beyond Bourgeois PC Culture
Ishmael Reed
Hollywood’s Last Days?
Peter Certo
There Was Nothing Humanitarian About Our Strikes on Syria
Dean Baker
China’s “Currency Devaluation Game”
Ann Garrison
Why Don’t We All Vote to Commit International Crimes?
LEJ Rachell
The Baddest Black Power Artist You Never Heard Of
Lawrence Ware
All Hell Broke Out in Oklahoma
Franklin Lamb
Tehran’s Syria: Lebanon Colonization Project is Collapsing
Donny Swanson
Janus v. AFSCME: What’s It All About?
Will Podmore
Brexit and the Windrush Britons
Brian Saady
Boehner’s Marijuana Lobbying is Symptomatic of Special-Interest Problem
Julian Vigo
Google’s Delisting and Censorship of Information
Patrick Walker
Political Dynamite: Poor People’s Campaign and the Movement for a People’s Party
Fred Gardner
Medical Board to MDs: Emphasize Dangers of Marijuana
Rob Seimetz
We Must Stand In Solidarity With Eric Reid
Missy Comley Beattie
Remembering Barbara Bush
Wim Laven
Teaching Peace in a Time of Hate
Thomas Knapp
Freedom is Winning in the Encryption Arms Race
Mir Alikhan
There Won’t be Peace in Afghanistan Until There’s Peace in Kashmir
FacebookTwitterGoogle+RedditEmail