“The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,””
James Kidney, a lawyer who worked at the SEC for 18 years.
On Tuesday (Sept. 24), the Wall Street Journal reported that JP Morgan was offering the government $3 billion to settle (paywall) an unspecified number of criminal probes after the Department of Justice threatened to file suit in an investigation of its pre-crisis mortgage dealings. Yesterday, it reported that regulators are looking for something like $11 billion in compensation (paywall), including $7 billion in penalties and $4 billion in consumer relief.
These numbers are still in flux, but depending on how many cases the payment resolves, it would likely be the largest single-bank payout in the history of financial regulation, supplanting HSBC’s $1.92 billion money-laundering penalty.
But despite the conspicuous nature of the announcement, JPMorgan is still admitting only to non-scienter-based charges under Sections 13(a) and 13(b)(2) of the Exchange Act. Basically, the bank should have made more accurate public filings and had better internal controls. Serious issues, for sure, but a long way from fraud-based charges…
If you were wondering why the new House bill on bank bailouts seemed like it was written by Citigroup, it’s because it was literally written by Citigroup.
“Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill.”
we totally need more government to protect us from this though
More banks writing their own rules.