NOT the headline of my love life
Since I’ve gotten exposure to the financial world in news, one thing that has always stuck with me is how firms and officials dance around accountability; for example, no one has gone to jail due to the 2008 financial crisis.
That’s why today’s announcement that JP Morgan has to pay almost a billion dollars AND admitted wrongdoing comes as a surprise for me. This comes as a shift in behavior from the SEC, the financial regulating body of the government and its new, aggressive leadership in the form of Mary Jo White. Banks and other large institutions do not normally admit any wrong doing despite settling with regulatory agencies because admitting wrongdoing can make itself vulnerable if future inconsistencies happen.
Here are some of my favourite the more recent scandals post-financial crisis.
- JP Morgan’s oversight led to $6 billion in trading losses in early 2012.
- Barclay’s has been implicated to manipulating the LIBOR rate – the London Inter-bank Offered Rate which is an important benchmark rates that influence things like mortgages or car payments.
- HSBC has been money laundering for Mexican drug cartels. I wonder if Walter White has his money there.
- The Vatican Bank has sketchy accounts used to smuggle money.
- Goldman Sachs buys a tonne (in actuality, more like thousands of thousands of tonnes ) of aluminum to set the price of it.
- PVM Oil Futures had a trader who traded half a billion dollars of oil while drunk causing oil prices to spike.
- Dow Jones had a Flash Crash of nearly a thousand points due to computer error. To put this into context, people freak out about the Dow moving a hundred points on a daily basis.
<Takeaway: Finance has scandals. Surprise, surprise!
EconFact 