JPMorgan Chase Makes Banks Uneasy
Lots of Fed Agencies Investigating JPMorgan
John Gotti made rival mobs uneasy in the 1980s. Now Jaime Dimon worries other big banks too large to be regulated. In the 1980s Gotti, “the Teflon Don” who headed the Gambino Crime Family, enjoyed interviews by the press. The other four New York mob families disliked attention drawn to their industry. Similarly Jamie Dimon’s leadership style is now a worrisome thing: 8 federal agencies are “looking into the bank’s business.” * Could banks like Citigroup ** and Bank of America be next?
The unwelcome agencies include the Securities and Exchange Commission, the Federal Deposit Insurance Commission, the Comptroller’s Office, the Commodities Trading Commission and the FBI. Among wrongdoing possibilities are failure to alert authorities to JPMorgan suspicions about the Madoff Ponzi scheme and whether JPMorgan lied to investors about the risky bets inherent in the securities it offered.
Until now, the banking industry has convinced its friends in Congress that, yes, the reduction of federal supervision played a huge role in the 2007-8 banking meltdown, but, no, no new regulation is needed. During the signs of recent recovery, Jamie’s arrogance inspired imitation. But now inside the industry, cooperation might help avoid incarceration.
Unlike John Gotti, there’s not much chance Jamie Dimon and his cohorts will do time for the damages they did and still do to ordinary citizens who have to use an under-regulated banking system and—if it fails again—bail banking out again. Organized crime does things that are against the law while banking does things that ought to be against the law. However, when the FBI gets into the picture, you never know….
* For details, see the March 27 New York Times reports on JP Morgan and Jaime: JPMorgan Chase Faces Ful#27FFC5
**plus Citigroup and money laundering: Federal Reserve Faults C#280049