J P Morgan pays $100M, admits fault in London trades
Source: NBC News
J P Morgan Chase has agreed to pay $100 million and admit its traders engaged in reckless behavior to settle charges that it manipulated markets as part of its so-called London Whale trades on a specific day last year.
The fine and admission of questionable conduct are milestones for the Commodity Futures Trading Commission, which used new authorities granted under the Dodd-Frank Act to curb manipulative conduct. Among other things, the law allows the commission to crack down on those who "intentionally or recklessly" use "any manipulative device" or scheme to defraud other investers
The CFTC said that JPMorgan traders in London sold off $7 billion in derivatives tied to a price index of corporate bonds on Feb. 29, 2012 including $4.6 billion worth in a three-hour span. Derivatives are investments whose value is based on some other investment, such as oil and currencies. JPMorgan was betting that the price of the index would drop. When the traders sold their derivatives, the price of the index plunged.
That was a "staggering volume" and the most ever traded by the bank in one day, according to the CFTC. The traders realized that the huge volume of the derivatives they had amassed could affect the market, and they decided to do so, the agency said.
Read more: http://www.nbcnews.com/business/jpmorgan-pays-100m-admits-fault-london-trades-8C11401097
Well what do you know.....they are crooks...they admit they are crooks.............and this quote from another part of the story, says that it is not the first time that they have admitted that they are crooks.....
"Wednesday's settlement comes less than a month after JPMorgan agreed to pay $920 million and admit fault in a deal with the Securities and Exchange Commission and other U.S. and British regulators. "
AtheistCrusader
(33,982 posts)Stuart G
(38,453 posts)But if the company made say ...400 million on the trades, then it is only 25 percent of the profit..not bad. It was probably more.
I wish the CEO of that company had to pay the 100 million.
Saviolo
(3,283 posts)Until the cost of the fines and settlements rivals the amount of money they make by breaking the rules. If they made hundreds of millions of dollars on that one risky trade, then the cost benefit is clear, and they can continue to make those risky trades, and paying the fines becomes a cost of doing business. Until they're actually punitive, there's no reason for them not to continue the activity and pay the fines if and when they are forced to.
secondvariety
(1,245 posts)I didn't think so.
Snake Plissken
(4,103 posts)They got punished with a tax break
IronLionZion
(45,563 posts)so we might as well hand over social security to these job creators so they can screw us all much more "efficiently" than the socialist government.
I shouldn't need this on DU but you never know:
Thor_MN
(11,843 posts)"J P Morgan Chase has agreed to pay $100 million and admit its traders engaged in reckless behavior to settle charges that it manipulated markets as part of its so-called London Whale trades on a specific day last year. "
So what about the other days?