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CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

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Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#161

Post by [deleted] »

mrtksn wrote: post #63
j7ake wrote: post #51

Earlier quoted context omitted.

It’s crazy. If one tried to steal 10k from the bank, you would go to jail. If you steal millions through illegal trade practices, you just pay a fraction of what you stole.

Even if they had exactly the same outcome, one is theft the other is simply breaking the rules. It's a bit like killing a person using a gun and killing a person as a result of driving like the rules don't apply to you. Once it is established that you did the act, the first one undoubtedly puts you in jail for a very long time no matter who you are and the second one may get you a fine and no jail time so that no har…

[deleted]

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#162

Post by toshk »

hogFeast wrote: post #158
toshk wrote: post #102

Earlier quoted context omitted.

Its not very different from the Flash crash, in 2015 an independent trainer named Navinder Singh Sarao was sued for manipulating the market, he was creating a lot of orders and cancelling them tricking the flash trading computers to push up the prices, he made around 45 million in the process while living in his parent house. In 2020 he was convicted with a year of confinement at home, no jail time, and a trading ban…

You misunderstand a lot about what went on there. One, there is no question that Sarao had nothing to do with the flash crash. The cause of the flash crash was a fund manager adding an extra zero to a trade they were making. The reason Sarao was blamed was to put pressure on him, and because the SEC needed to blame someone for there total failure to properly manage markets (the person who prosecuted the case against…

You are probably very right

The story I remember was a popular documentary which had a story arch of a single trader single breaking the market from his parents bedroom. Which is a good story but most likely just a small part of the truth; also probably why the Wikipedia just mentions him shortly.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#163

Post by spaetzleesser »

maxwelldone wrote: post #77
you-liquidated wrote: post #76

Earlier quoted context omitted.

US prosecutors literally said that they cannot criminally charge JPM (in another case) because that would destabilize the US financial system. They are literally "too big to jail".

What's stopping them from charging the people responsible? Are the people so irreplaceable that they are effectively JPM?

It’s bad for campaign donations and bad for future highly paid job prospects in the financial industry. So politicians and agency workers have strong incentives to not be too tough on banks.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#164

Post by BizarroLand »

axismundi wrote: post #29

“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains,” added Division of Enforcement Director James McDonald. No, Mr McDonald, it's quite the opposite. The important message is that if your organization can keep the profits from criminal activities higher than the penalties, they can perpetua…

If any of us had the opportunity to make $1 billion dollars and pay a $920 million dollar "naughty boy" fine after the fact, who here would say no?

The fine should be ALL of the ill-gotten gains and then a naughty boy fine on top of it. To do otherwise means that you did not do justice.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#165

Post by Traster »

lordnacho wrote: post #64
lostinquebec wrote: post #44

Earlier quoted context omitted.

I often wonder: wouldn't fines paid as a percentage of stock be a better deterrent? Taking stock off shareholders changes the fraud equation from risk of fine vs the profitability upside, to shareholder's losing real value. That's the role of shareholders AFAICT, to hold their board and the company accountable. Fail to do so and lose your shareholding seems the right direct risk. The fines could also be a lot larger,…

But there's a market where you can exchange the two, so they are roughly the same thing. If you have your 1% shares fined away, you can buy back the upside, if that's what you want. Or if you have a fine of 1% equivalent in cash, you can sell shares to pay for it. Either way you've lost 1%, but you can decide whether to hold the upside exposure and voting control. I think the key is the size of the fine. $1B to JPM i…

I think it's really important for people to understand that $1Bn isn't a lot of money to JPM because they do lots of things. They made $30Bn last year - but this specific trading business probably made nothing like that. They're doing consumer banking, investment banking, commercial banking, asset and wealth management. It might be true that $1Bn isn't a huge sum compared to the total profitability of JPM but I don't see why JPM's consumer banking arm has anything to do with the fine. Most likely these trading desks sum up to around 50-100 people at most. It's a very profitable sector (when you're breaking the law) but it's a tiny tiny part of what JPM do, and the idea that we should fine JPM more because they have lots of other businesses is just kind of crazy.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#166

Post by __alexs »

gruez wrote: post #156
__alexs wrote: post #151

Earlier quoted context omitted.

A world in which lying is not punished is incompatible with progress.

It's not really lying though? When you send a spoofed order, you really are willing to buy/sell shares at whatever price you offered. It's just that you quickly retract that offer. It's not like you put in a order, someone accepts it, then you say "haha just kidding".

It is what you're describing because the buyers are a bit dim and will pile in.

If you place the spoof orders knowing that and trying to create that behaviour then yes it's lying, but with extra steps.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#167

Post by missedthecue »

j7ake wrote: post #51
axismundi wrote: post #29

“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains,” added Division of Enforcement Director James McDonald. No, Mr McDonald, it's quite the opposite. The important message is that if your organization can keep the profits from criminal activities higher than the penalties, they can perpetua…

It’s crazy. If one tried to steal 10k from the bank, you would go to jail. If you steal millions through illegal trade practices, you just pay a fraction of what you stole.

The article directly contradicts your comment, stating that ill-gotten gains were repaid in addition to hundreds of millions of dollars of fines.

Perhaps the government is lying about this, but at that point, you're just believing a conspiracy.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#168

Post by missedthecue »

jbay808 wrote: post #145
rbarnes01 wrote: post #144

Earlier quoted context omitted.

"... including the highest restitution ($311,737,008), disgorgement ($172,034,790), and civil monetary penalty ($436,431,811) amounts in any spoofing case." Unless you are implying that JPM profited more than $172 million, the report suggests the government took the profits.

Is that penalty going to hit the people who were steering the ship at the time, who got big bonuses? Or is it only going to impact the bonuses of the people who are steering the ship today?

The CEO of JPM between 2008 and 2016 (the time period in question) is the same CEO that is in charge today.

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#169

Post by missedthecue »

plebianRube wrote: post #84
axismundi wrote: post #29

“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains,” added Division of Enforcement Director James McDonald. No, Mr McDonald, it's quite the opposite. The important message is that if your organization can keep the profits from criminal activities higher than the penalties, they can perpetua…

I don't think people realize how much money JP makes. A cursor search shows that the fine is less than 10% of their last quarter NET income of 12.1 billion. I would certainly keep doing illegal things if my only penalty was a simple fine like that every 10 years.

Trading in the silver markets is not JP Morgan's only source of revenue...

Re: CFTC Orders JPMorgan to Pay Record $920M for Spoofing and Manipulation (2020)

#170

Post by spaetzleesser »

you-liquidated wrote: post #85
nfin wrote: post #78

Earlier quoted context omitted.

a (good) source would've been great :)

> Holder’s memo asserted that “collateral consequences” from prosecutions—including corporate instability or collapse—should be taken into account when deciding whether to prosecute a big financial institution. > That sentiment was echoed as late as 2012 by Lanny Breuer, then the head of the Justice Department’s criminal division, who said in a speech at the New York City Bar Association that he felt it was his duty…

Instead of worrying about the banks he should have been worried about the moral fabric of the country. At least since the bailouts 2008 there is a (mostly justified) perception that the system is rigged in favor of the wealthy. This has made a lot of people very cynical and has allowed a ton of conspiracy theories to rise. If this trend continues there will be a point when people will vote in a dictator.

It’s already a big problem that politics attracts more and more crazy people and reasonable people are staying away.

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