Yea!!!! JPMorgan Deal Brings $300M To Calif. Pension Funds

[warrior1]

http://sacramento.cbslocal.com/2013/11/19/jpmorgan-deal-brings-300m-to-calif-pension-funds/

SACRAMENTO, Calif. (AP) — JPMorgan Chase & Co. will pay nearly $300 million to California’s public employee and teacher pension funds as part of a settlement related to mortgage-related investments, state Attorney General Kamala Harris announced Tuesday.

The $299 million in damages will settle claims that the company misrepresented the value of residential mortgage-backed securities sold to the California Public Employees Retirement System and California State Teachers’ Retirement System between 2004 and 2008.

“JP Morgan Chase profited by giving California’s pension funds incomplete information about mortgage investments,” Harris said in a statement. “This settlement returns the money to California’s pension funds that JP Morgan wrongfully took from them.”

The settlement is part of a broader, $13 billion settlement between the investment company and the U.S. Department of Justice. Under the larger settlement, JPMorgan will provide $4 billion in mortgage relief to the states, including California.

snip

[trumad]

1. Excellent.

I still want to see jail time for executives.

[frazzled]

2. And $1.5 billion to underwater homeowners, $4 billion to relief

for struggling homeowners in Detroit, NY, and elsewhere ...

Despite the calls for blood, getting a financial ceo to sit in jail would do nothing for the people or the country. It must be said that this kind of nose-to-the-grindstone legal work will actually have a real impact on people's lives--especially in a time when Congress refuses to act on anything.

The Obama administration has been very canny about trying to get things done for the PEOPLE in whatever ways it can, bypassing Congressional action to "legislate" around the edges. (And it does them with little fanfare.) Can't get a tax hike? Just sic your legal team on Jaime Dimon and get $13 billion to use in whatever way you want to help individuals and local governments (who were hurt by the actions of the bank.)

This is what I call justice.

[hughee99]

3. Some might argue that getting a ceo to sit in jail would ensure other CEO's

don't encourage these practices at their own firms. This is not the last time a bank will do such a thing, because it's profitable and there's little incentive from them to stop. The fine is WAY less than they made in profits from such a scheme, and no one is going to even be charged with a crime.

Someone robs your house. They take EVERYTHING, then they agree to give back all the stuff from your living room if you can just call it even. Yes, it's great you got your living room stuff back, but it's not "justice", nor is it really going to discourage them from doing it again.

[frazzled]

5. That's the argument that is often made in favor of the death penalty

That it acts as a deterrent. It rarely has.

As long as there is greed, and as long as there are lax laws (we're forgetting that making a specific criminal case against these executives is not a sure thing: often times, they were not really breaking any laws per se), companies will try to get away with whatever greedy schemes they think they can get away with. People have been going to jail for insider trading and all manner of financial shenanigans for decades and decades; it doesn't stop insider trading.

So I'm not sure the deterrence argument is a valid one. Maybe once we get better regulatory laws in place so that prosecutions are actually possible. In the meantime, the Obama administration has gone beyond meaningless penalties. This was big time: half the annual profits of the nation's largest financial institution.

Mr. West’s negotiating tactics underscore a broader strategy shift at the Justice Department, where prosecutors are seeking to hit Wall Street where it hurts most: the bottom line. After critics faulted the Justice Department for imposing fines considered little more than a slap on the wrist, Mr. West and Attorney General Eric H. Holder Jr. have signaled to the nation’s biggest banks that the billion-dollar mark is now a floor rather than a ceiling.

The deal with JPMorgan, which eclipses other Wall Street settlements, is the largest sum a single company has ever paid to the government. The bank, at the Justice Department’s insistence, also admitted to a statement of facts that outlined how it failed to fully disclose the risks of buying risky mortgage securities from 2005 to 2008.

And the case, a symbol of the government’s wider crackdown on Wall Street’s sale of troubled mortgage securities to pension funds and other investors, may set a precedent for cases against other major banks and industries like health care, where fines have already swelled in recent years.

http://dealbook.nytimes.com/2013/11/19/13-billion-settlement-with-jpmorgan-is-announced/?hp&_r=0

[hughee99]

6. Sure, that's the argument for ANY deterrent.

The deterrent argument for the death penalty is different because it's comparing the deterrent of life in prison vs. the deterrent of being put to death. In this case, it's the deterrent of going to jail vs. not going to jail? Of course there's some deterrent here, or EVERYONE would do it.

It's a more compelling argument if it isn't being weighed against someone's life (as it is in a death penalty case). The questions "Is the value as a deterrent worth MORE than LIFE of the perpetrator of the crime?" and "Is the value as a deterrent worth MORE than the FREEDOM of the perpetrator of the crime" will often get different answers from the same people.

Don't get me wrong, I'm not pissing on $13 BILLION dollars, but the Obama administration didn't TAKE half of their annual profits as punishment. Morgan OFFERED it as a deal to go away, because they spent YEARS making huge profits for this and now only have to give a fraction back to get out of trouble, and because (if the other stories are accurate) they've already figured out that much of this fine is going to be TAX DEDUCTIBLE as a "business expense".

[frazzled]

8. Fair enough

Perhaps the comparison to death penalty proponents was inapt. But I think the arguments regarding the legal possibilities of prosecution and the failure of past prosecutions to deter financial misconduct still stand somewhat.

I'm not saying they SHOULDN"T be prosecuted. I'm just saying that (a) it's not as easy to do as some think; and (b) it won't prevent future misconduct. It would satisfy our need for revenge, however. And I'm not averse to that.

At the same time, $13 billion dollars is not chump change, and it looks like it will be put to good use. (Unlike, say, the tobacco industry settlements--which seem to have vanished mostly into lawyers' pockets and general state coffers.)

[hughee99]

9. Agreed.

I certainly don't think it will prevent all future misconduct, but I think the possibility of prison time might help a little. I'm also not suggesting it would be easy to prosecute, but at this point, it looks like they're not even trying. If the fine is going to be far less than the profit made, and there's not even the possibility of anyone going to jail, that's barely an incentive to stop the practice at all.

[Scuba]

4. I disagree that "getting a financial ceo to sit in jail would do nothing for the people ..."

I disagree that "getting a financial ceo to sit in jail would do nothing for the people or the country."


It would act as a deterrent, helping protect the People from future financial crimes. When no one goes to jail, and fines are less than the amounts stolen, there's a strong incentive to engage in more criminal activity, not less.

[malaise]

7. So contrary to what has been bandied about Holder is collecting big bucks from these crooks

Rec