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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsJPMorgan bullied bank regulators, report says
http://www.washingtonpost.com/business/economy/jpmorgan-bullied-bank-regulators-documents-and-testimony-show/2013/03/15/bb189da0-8d9f-11e2-9838-d62f083ba93f_story.htmlAndrew Harrer/BLOOMBERG - Ina Drew, former chief investment officer with JPMorgan Chase, arrives to a Senate Permanent Subcommittee on Investigations hearing. JPMorgan Chase compensated chief investment office traders in a way that encouraged risk-taking before the unit amassed losses exceeding $6.2 billion, a Senate committee said.
When bank regulators wanted daily profit and loss statements from JPMorgan Chases investment division, the bank initially refused.
When examiners issued recommendations the bank didnt like, executives yelled and called the federal officials stupid.
At one point, the top brass at the prestigious bank ambushed a junior bank examiner, becoming loud and combative when he disclosed disputed results of an exam.
Those incidents are part of a rare and detailed look into the interactions between Washington regulators and Wall Street, described in congressional testimonies Friday and a Senate report on a massive trading loss at JPMorgan.
apocalypsehow
(12,751 posts)xchrom
(108,903 posts)You could tell the exact moment when Ina Drew decided she had nothing left to lose.
Drew, who ran JP Morgan's $350bn investment office, testified in front of the Senate today about the infamous London Whale trading debacle that racked up $6.2bn in losses for JP Morgan last year. She began her testimony by recounting her decades at JP Morgan "through seven mergers," talked about managing her job and her kids in a search for work-life balance, and gave credit to the "great CEOs" she had worked under, including current chief executive Jamie Dimon.
But Drew did not step up to take responsibility herself. She talked of trusting her deputies. She insisted that JP Morgan had provided its regulators with a daily account of the profits and losses in the bank's investment office despite Senate documentation to the contrary and the testimony of a regulator who later directly said she was wrong, and that the bank only provided the daily account after the whole debacle blew up in May. When Drew was asked if she knew one key and obvious fact whether JP Morgan had skipped a crucial yearly check on its trading limits she demurred that she couldn't recall.
Drew, however, was one of the villains in the bank's own account of what went wrong, and you could see the pressure building up in her mind as she declined to answer, paused, or claimed lack of recall. She ran the office that racked up the losses, and according to the Senate report, she applauded traders for risky bets on American Airlines.
snappyturtle
(14,656 posts)especially of the revelations. I especially enjoyed reading Ina Drew saying ol' Jamie Dimon knew what was really going on in her office.
Ichingcarpenter
(36,988 posts)The law does not pretend to punish everything that is dishonest. That would seriously interfere with business.
A criminal is a person with predatory instincts who has not sufficient capital to form a corporation.
GoldenOldie
(1,540 posts)I worked in the banking industry during the late 50's, 60's and early 70's, when Federal Auditors had the authority to immediately shut the doors of any bank for failing to allow access to any and all records of the bank.
Strict banking regulations were enacted after the stock market crash and bank failures during the late 1920's. NOt only were banks being audited by Federal Regulators but the individual Banks established their own BOard of Directors which employed their own Internal Private Audtors which would catch any problems before a Federal audit. I remember we'll, many a President/Manager who trembled when looking up and finding an auditor looking back and realizing he had just given a customer a "short term" loan to cover an insufficient check. No matter what the mount, this was considered illegal, if the bank held no collateral for the loan, even if the loan was for only 24hrs. Minor infractions were grounds for immediate dismissal and Findings of repeated or bigger infractions were cause to immediately close the doors of the bank.
If these regulations had sill been in place, the latest disaster of the housing market collapse, bank failures , etc., etc., would not have happened. Will we never learn?
perdita9
(1,144 posts)perdita9
(1,144 posts)Either way, she belongs in jail
dixiegrrrrl
(60,010 posts)I can hardly wait for the book to come out.
seriously.
some of the best reading are the stories of the "too big to fail" who tripped over their own hubris.