WILLIAM K. BLACK
Black is an associate professor of economics and law at the University of Missouri-Kansas City. A former bank regulator who led investigations of the savings and loan crisis of the 1980s, he is the author of the book The Best Way to Rob a Bank is to Own One. He just wrote the piece “Will the JPMorgan Chase Settlement be Fair to the Public?” for CNN.com. The piece states: “If the reports of a proposed $13 billion settlement between the Justice Department and JPMorgan Chase & Co. are correct, the public and the company’s shareholders will not see justice done.
“While the tentative deal is being portrayed as a larger settlement, it really represents the company coming forward with an additional $9 billion. The other $4 billion represents loan workouts that JPMorgan would do anyway to reduce its losses on mortgages that would otherwise cause it greater losses through foreclosure. …
“A settlement of this kind would release JPMorgan and its officers from civil and criminal liability for a wide range of alleged frauds. Many of these alleged frauds added to the profits of JPMorgan and the companies it acquired. The shareholders should not be enriched by fraud.
“Where officers’ frauds created profits that enriched the shareholders, JPMorgan should fire such officers, and the Justice Department should prosecute and recover any fraud proceeds. JPMorgan should pay the damages it caused to others through fraud. In cases where a firm’s senior officers engage in a wide range of frauds, the courts should award punitive damages against the officers and the firm.
“The problem in terms of justice is when the frauds created fictional profits that enriched corporate officers through unjust bonuses but also created real losses that were booked by the company years later. The shareholders suffer twice from such frauds — they paid the unjust bonuses and then have to bear the losses.”
ROBERT SCHEER, http://www.TruthDig.com
Editor of TruthDig.com, Scheer just wrote the piece “What Fine? Why JPMorgan Is Laughing All the Way to the Bank,” which states: “The point of accountability for the bank’s failing is crucial because [JPMorgan head Jamie] Dimon has been a leading opponent of tougher banking regulations since before even the 2008 crisis. In the 1990s, Dimon had worked with Sanford I. Weill of Citigroup in gutting the sensible restraints of the Glass-Steagall law, and once those restrictions on too-big-to-fail banks were removed, Dimon built JPMorgan Chase into what is now the biggest U.S. financial institution by assets. Dimon has been an outspoken opponent of even minor attempts to stiffen such regulations during the hearings on the Dodd-Frank legislation.
“Dimon denounced the tepid efforts of his old Chicago buddy-turned-president to bring a modicum of oversight to the financial industry and pointedly soured on the Democrats in the last election. This despite the fact that Obama had appointed former JPMorgan executive William Daley to be his chief of staff and that then-Treasury Secretary Timothy Geithner had more frequent contact with Dimon than with any other financial industry executive.”
Scheer’s books include The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.
For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020, (202) 421-6858; or David Zupan, (541) 484-9167