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JPMorgan gets yet another 'sweetheart' deal from feds for flagrant market corruption

By Michael Hiltzik, Los Angeles Times on

Published in Business News

Judging from the statements put out Tuesday by federal securities regulators and the Department of Justice, JPMorgan Chase & Co. got caught in a serious, flagrant, years-long plot to rig financial markets.

The Justice Department broke the offense down into two "schemes to defraud: the first involving tens of thousands of episodes of unlawful trading in the markets for precious metals futures contracts, and the second involving thousands of episodes of unlawful trading in the markets for U.S. Treasury futures."

Dan M. Berkovitz, a member of the Commodity Futures Trading Commission, called "the scope of misconduct and market harm ... unparalleled."

The government slammed JPMorgan with a record-breaking $920 million in fines and penalties.

Pretty serious. Yet the market watchdog organization Better Markets terms the settlement a "sweetheart deal."

Better Markets is right. This is at least the third market manipulation accusation JPMorgan has faced in recent years, including a bid-rigging scheme in the California electricity market in 2010 and 2011 for which the bank paid a $410-million penalty.

 

The truth is, the deal is such an indulgence that the bank had no trouble casting it virtually - and absurdly - as a triumph of good governance.

The traders directly responsible for the market manipulation are "no longer with the firm," the bank's formal statement noted. "We appreciate that the considerable resources we've dedicated to internal controls was recognized by the DOJ, including enhancements to compliance policies, surveillance systems and training programs."

Why is this man smiling? The not-embattled JPMorgan chairman and CEO Jamie Dimon leaves a meeting with President Obama over the budget standoff last week.

Well, sure. Great surveillance and internal controls, JPMorgan. Kudos for allowing the criminality to continue for only eight years.

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