Brian McLane

Media and Social Commentary

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CHASE BANK SKATES ON 40 BILLION IN PROFITS WITH 153 MILLION DOLLAR FINE

June 21st, 2011 · No Comments · Social Commentary

Crime does pay. Especially if you’re a Mega Bank. And I say that affectionately about my own bank Chase, among the best of the worst.

CRIME PAYS FOR U.S. BANKS

CRIME PAYS FOR U.S. BANKS

JPMorgan Chase is paying $153.6 mllion to settle a civil case the Securities and Exchange Commission brought against them on charges that they defrauded investors regarding mortgage securities, Reuters reports. The deal is they admit no guilt which is part of the show. But we all know the deal. They decide to do something crooked, and if they get caught the fine will pale in comparison to the profits.

In this case, CBS News says that JP Morgan “failed to tell investors that a hedge fund helped select the investment portfolio and then bet that the portfolio would fail,” according to the SEC. CBS says that a cross spectrum of society lost money on the deal, including General Motors staffers, a religious financial group, and a retirement services organization. The $150 million in investments went south in just 10 months, Reuters says.

Bankers sold a collateralized mortgage obligation in 2007 to ensure that it could get credit-scarred mortgage securities off its books. The bankers who came up with this scheme are no longer with the bank which is their way of finding absolution. Here’s a good one. A March 2007 email from the DSO distribution department head said to sales staffers, “We are soooo pregnant with this deal, we need a wheel-barrel to move around. Let’s schedule the cesarian, please!”

You can click the image above (appropriate) to watch the PBS Newshour story on this. It’s disgusting.

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