Posts filed under “Corporate Management”
Fines here, fines there, fines everywhere!
The Wall Street Journal discusses the proposed $11 billion dollar JPM fine, but buries the good stuff in this morning’s article on Jamie Dimon (This Generation’s Greatest Banker! ®)
We have been tracking JPM’s fines, but if you want an industry overview, try this collection: Here is a quick
Top 10 Bank Fines
$25 Billion for Foreclosure processing abuses.
Five Banks: Wells Fargo & Co., J.P. Morgan Chase & Co., Citigroup Inc., Bank of America Corp., Ally Financial Inc.
Regulators: U.S. Department of Housing and Urban Development, U.S. Department of Justice and 49 state attorneys general (2012)
$9.3 Billion for Foreclosure abuses.
Thirteen Banks: Bank of America Corp., Wells Fargo & Co., J.P. Morgan Chase & Co. and 10 others
Regulators: Office of the Comptroller of the Currency and Federal Reserve (2013)
$1.9 Billion for Money-laundering
Regulators: U.S. Department of Justice, Treasury and others (2012)
$1.5 Billion for Manipulating Libor rates.
Regulators: Commodity Futures Trading Commission, former U.K. Financial Services Authority, Swiss Financial Market Supervisory Authority, U.S. Department of Justice (2012)
$920 Million for Lack of oversight of giant bets by ‘London whale.’ (poor internal controls).
J.P. Morgan Chase & Co.
Regulators: Securities and Exchange Commission, Office of the Comptroller of the Currency, Federal Reserve and U.K.’s Financial Conduct Authority (2013)
$550 Million for materially misleading and incomplete information in sale of mortgage-related securities
Regulators: U.S. Securities and Exchange Commission (2010)
$453.6 Million for Manipulation of interbank lending rates (Libor).
Regulators: U.S. Department of Justice, U.S. Commodity Futures Trading Commission, former U.K. Financial Services Authority (2012)
$410 Million for Electricity market manipulation
J.P. Morgan Chase
Regulators: U.S. Federal Energy Regulatory Commission (2013)
$335 Million for Discrimination against black and Hispanic borrowers.
Bank of America
Regulators: U.S. Department of Justice (2011)
Note that the bad behavior generated big bonuses for execs based on the false (perhaps even fraudulent) depiction of profits. Now that this bad behavior has led to fines which resulted in the profits going away, shouldn’t those prior bonuses also disappear?
What should the shareholders pay for this?
J.P. Morgan Chief Dimon Meets With Holder
By DEVLIN BARRETT and ROBIN SIDEL
WSJ, September 27, 2013 http://online.wsj.com/article/SB10001424052702303796404579099041935922038.html
Click to enlarge Source: Institute for New Economic Thinking NYU prof Robert Engle, who long-time blog readers may recall from this post a ways back, won the Nobel prize for his work on Volatility. He has developed new ways to measure “Systemic risk” from his perch at the Volatility Institute at NYU: “We…Read More
Last week, I posted Andrew Ross Sorkin’s NYT video on “The Financial Crisis, Five Years Later,” with a single word editorial, all in caps: BULLSHIT. The views espoused in this video were such unmitigated nonsense that I ended up changing my Sunday WaPo column in part to respond to that silliness: Lehman’s thud signaled an…Read More
“Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.” -W. Edwards Deming Dr. Deming’s Ideas Dr. Deming’s famous 14 Points, originally presented in Out of the Crisis, serve as management guidelines. The…Read More
Time to update the tally: Each year, JPM has profits of about $25 billion dollars on revenues well over $100 billion dollars. Part of the cost of generating that revenue in a variety of dubious and even extra-legal ways are fines. Since 2011, JPM has been fined $8B: $56 million (April 2011) $153.6 million (June…Read More
Short list: 1. At the Ira Sohn Investment Research Conference in May 2008, hedge fund manager David Einhorn explained why he believed Lehman Brothers was insolvent. At the time, Lehman was already significantly off its highs but still trading above $40. 2. Lehman’s accounting was especially opaque, even relative to other investment banks (and that’s…Read More
My Sunday Washington Post Business Section column is out. This morning, we look at how Microsoft’s slow decline in What’s behind Microsoft’s fall from dominance?. The short version is this: Once Gates & Co lost its Monopoly, they were unable to generate much in the way of successful new businesses line. Their decline was inevitable…Read More