PMorgan Chase, the country's largest bank, continues to reel from its $2 billion trading loss last week, which critics are touting as evidence that Wall Street is still making the types of dangerous bets that caused the financial crisis in 2008. JPMorgan Chase's stock plunged by nearly 10 percent the day after CEO Jamie Dimon disclosed the loss, erasing $13 billion from the company's value. Dimon, one of the loudest voices against government regulation of Wall Street, has been pilloried in the press for what he has described as a "terrible, egregious mistake." And now the Justice Department is investigating whether the controversy involved more than mere blunders, raising the prospect that the bank or its executives could be charged with violating securities laws. Did Dimon do anything illegal?
Dimon might have misled shareholders: When news reports shed light on the bad bet a month ago, Dimon dismissed them, saying they were nothing more than a "tempest in a teapot," says Peter J. Henning at The New York Times. It's illegal for executives to make false or misleading statements about "material information" to shareholders, and Dimon's "reassuring statements may have given an increasingly false sense of security to investors about JPMorgan's risk management." Federal investigators will have to figure out what Dimon knew about the trade, and when he found out it had gone sour.
"JPMorgan's loss: Illegal, or just bad judgment?"
Dimon messed up, but he didn't commit a crime: "We appear to be on the verge of making it a crime for a business to lose money," says Jonathan Macey at The Wall Street Journal. JPMorgan's loss is no one's business but its "stockholders and a few top executives and traders who will lose their bonuses or their jobs." Instead of cracking down, the government should trust that a profit-seeking entity like JPMorgan will "learn from this experience and do a better job" next time. Instead, the government is exploiting the controversy to increase its "power and influence."
"Losing money isn't a crime"
But this is hardly the bank's first offense: Dimon's JPMorgan has "systematically engaged" in legally dubious practices for years, says Richard Eskow at The Huffington Post. The company has "paid out billions to settle charges" that include bribery, corruption, perjury, forgery, investor fraud, and more. JPMorgan's "vast wealth" means lawsuits are nothing more than the cost of doing business in a "corrupt political system," which has failed to actually prosecute any executive connected to the financial crisis. What a shame.
"Jamie Dimon's JPMorgan Chase: Why it's the scandal of our time"
- The 10 worst-reviewed movies of 2013
- Diagnosing the Home Alone burglars' injuries: A professional weighs in
- Watch The Daily Show mock the NSA and the gamers they're spying on
- How did Love Actually become so controversial? A theory
- The secrets of happy families
- Americans are wealthier than ever*
- Antarctica recently experienced the coldest day in recorded history
- The science of making a guitar sound like a human voice
- The U.S. auto bailout is officially over. Here's what America lost and gained.
The history of Santa Claus: 7 interesting facts
Subscribe to the Week