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Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

dealbook.nytimes.com

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Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#51

Post by rayiner »

toomuchtodo wrote: post #48
tomp wrote: post #41

Earlier quoted context omitted.

> As to the financial sector, while it is obviously difficult to prosecute many financial crimes, I am not convinced that this is the primary explanation for the shortage of convictions lately. One of the primary explanations is that banks have become "too big to fail", and if you criminally charge a bank, you effectively make it fail. Basically, banks are powerful enough to get away with murder. http://www.theguardi…

> One of the primary explanations is that banks have become "too big to fail", and if you criminally charge a bank, you effectively make it fail. Basically, banks are powerful enough to get away with murder. So give the FDIC more power and a larger fund to draw on for bank failures. They already handle bank failures very very well, they'd be fantastic at spinning down banks accused and convicted of criminal activitie…

> We dismantled Arthur Anderson for their complacency in the Enron criminial enterprise. Why not banks?

And that was a terrible outcome. A huge, $10 billion a year corporation came crashing down, with tons of people losing their jobs, all because of the conduct of one team within the company that the rest of the enterprise had no knowledge of or control over. For a conviction that was overturned on appeal!

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#52

Post by gohrt »

rayiner wrote: post #20

There are a lot of comments along the lines of "why are the fines so low" or "why is nobody doing jail time?" And the answer to both those questions is: stiffer punishment would require stronger proof. Cartel activity, like much white collar crime in general, is extremely difficult to prosecute, because the difference between totally legal conduct and illegal conduct comes down to what people are thinking. Instead of…

The government has no problem with civil forfeiture -- seizing (with no refund) $10K from an individual on mere suspicion. Why should bank managers and shareholders be immune from this?

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#53

Post by fulafel »

rayiner wrote: post #20

There are a lot of comments along the lines of "why are the fines so low" or "why is nobody doing jail time?" And the answer to both those questions is: stiffer punishment would require stronger proof. Cartel activity, like much white collar crime in general, is extremely difficult to prosecute, because the difference between totally legal conduct and illegal conduct comes down to what people are thinking. Instead of…

Your [1] sounds odd to me, I haven't heard of this "more likely than not" type of standard in civil fines.

I also find statements like the following in papers that touch on the matter: "Unlike Common Law, Continental European Civil Law does not generally distinguish between standards of proof for civil and criminal matters. (15)" (http://www.coll.mpg.de/pdf_dat/2013_12online.pdf)

Anyone in the know care to comment?

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#54

Post by toomuchtodo »

rayiner wrote: post #51
toomuchtodo wrote: post #48

Earlier quoted context omitted.

> One of the primary explanations is that banks have become "too big to fail", and if you criminally charge a bank, you effectively make it fail. Basically, banks are powerful enough to get away with murder. So give the FDIC more power and a larger fund to draw on for bank failures. They already handle bank failures very very well, they'd be fantastic at spinning down banks accused and convicted of criminal activitie…

> We dismantled Arthur Anderson for their complacency in the Enron criminial enterprise. Why not banks? And that was a terrible outcome. A huge, $10 billion a year corporation came crashing down, with tons of people losing their jobs, all because of the conduct of one team within the company that the rest of the enterprise had no knowledge of or control over. For a conviction that was overturned on appeal!

If dismantling the organization isn't an option, and punishing individuals isn't an option due to corporate liability limitations, where does that leave us?

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#55

Post by shit_parade »

penguindev wrote: post #49
misiti3780 wrote: post #45

Earlier quoted context omitted.

agreed - but a small point - the banks printing money are really basically government entities (the federal reserve, ECB, etc). the banks the article + book are talking about are private entities committing serious fraud and not getting being prosecuted for it.

I disagree about the federal reserve being a government entity. It's owned by banks - a "self regulating" private cartel by charter. Even congress can't "audit" the fed. The fed controls the government much more than vice versa. Sure they will spin some line like 'profits' from the fed go to the government (profits above which are distributed to the private bank shareholders, of course!) but that's like saying I get…

Banks are complicated shell structures for sure, just look into BIS, a 'central bank' for central banks. However the federal chair is appointed by the white house.

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#56

Post by shit_parade »

salesforce_wha wrote: post #37
Shivetya wrote: post #32

Earlier quoted context omitted.

but in the end you are not punishing the bank, it merely is an entity with no physical means of being punished. To punish it you need to throw their boards into jail. Fines are paid by share holders if any, hence is the bank punished? Not unless depositors leave in droves. You cannot fine a bank for its holdings as those are the funds and properties of other people, the bank is merely managing money for others. if yo…

Working under the assumption that: 1. The banks only care about one thing -- profits. 2. Individuals at the bank primarily only care about their pay (talking about the ones responsible for massive fraud and have bonus structures that encourage it, not the tellers at your local branch). If government took actions to pull all revenue (plus some) generated by these schemes it could go a long way in changing the culture.…

>There is no simple solution,

How do you know, perhaps jail time for executives would work. The problem is there is no simple implementation and to expect a corrupt government to police a corrupt bank is laughable, these people are often colleagues, co-workers, even friends who take turns writing laws and giving each other pay checks.

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#57

Post by penguindev »

I would like to offer a small historical perspective on the power of banks:

Legal Tender Act, 1862 [1]:

"Thaddeus Stevens, the Chairman of the House of Representatives Committee of Ways and Means, ... denounced the exceptions, calling the new bill "mischievous" because it made United States Notes an intentionally depreciated currency for the masses, while the banks who loaned to the government got "sound money" in gold."

Banks always get the first class life boats, and set their own rules (think about it, they buy influence, it's not that hard when you're a bank). I think Europe just missed some kickbacks the old fashioned way.

1. http://en.wikipedia.org/wiki/United_States_Note

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#58

Post by harryh »

misiti3780 wrote: post #26

If anyone is interested in learning more about why no one goes to jail, and banks dont even have to admit they did anything wrong, etc., I recommend you go pick up a copy of Matt Taibbi's new book "The Divide" He goes into great deal regarding why the most egregious white collar crimes such as HSBC laundering money for the Mexican cartels / terrorist organizations ended with a simple 1.9 billion dollar fine ( http://…

Be very careful when reading Matt Taibbi. He's not a journalist trying to illuminate a reality about the world. He's a storyteller tying to marshall anecdote in support of a good read. A lot of what he says isn't exactly wrong...but it's really true either.

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#59

Post by penguindev »

shit_parade wrote: post #55
penguindev wrote: post #49

Earlier quoted context omitted.

I disagree about the federal reserve being a government entity. It's owned by banks - a "self regulating" private cartel by charter. Even congress can't "audit" the fed. The fed controls the government much more than vice versa. Sure they will spin some line like 'profits' from the fed go to the government (profits above which are distributed to the private bank shareholders, of course!) but that's like saying I get…

Banks are complicated shell structures for sure, just look into BIS, a 'central bank' for central banks. However the federal chair is appointed by the white house.

One puppet (WH) appointing another puppet (fed chair) IMHO. We all know it.

Re: BIS, I haven't looked into that much; I'm afraid I'm depressed enough already :-)

Re: Four Banks, Including JPMorgan, Fined in Europe Over ‘Cartel’ Behavior

#60

Post by misiti3780 »

harryh wrote: post #58
misiti3780 wrote: post #26

If anyone is interested in learning more about why no one goes to jail, and banks dont even have to admit they did anything wrong, etc., I recommend you go pick up a copy of Matt Taibbi's new book "The Divide" He goes into great deal regarding why the most egregious white collar crimes such as HSBC laundering money for the Mexican cartels / terrorist organizations ended with a simple 1.9 billion dollar fine ( http://…

Be very careful when reading Matt Taibbi. He's not a journalist trying to illuminate a reality about the world. He's a storyteller tying to marshall anecdote in support of a good read. A lot of what he says isn't exactly wrong...but it's really true either.

i know he is trying to sell books - but look it up, HSBC laundered money for the cartels, they got caught, paid a 1.9 billion dollar fine, and no one went to jail - and the bank didnt even have to admit what they did was wrong.

he is "right" about the important parts of this story anyways

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