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Regulators may be getting ready to order JPMorgan Chase to bolster its safeguards against money laundering.
January 11 -
The Fed and OCC orders against JPMorgan required them to fix their internal controls related to its trading activities, but stopped short of requiring sweeping changes or mandating a monetary penalty.
January 14 -
JPMorgan Chase's (JPM) board is expected to dock the bonuses of chief executive Dimon and former chief financial officer Douglas Braunstein, as a consequence of the company's $6 billion trading loss at its chief investment office last spring, the Wall Street Journal reported on Saturday.
January 13
Reading the American Banker article "
Some members of Congress asked specifically whether compensation would be clawed back from those responsible. Dimon replied that this option was on the table. When asked if his compensation was also on the table, he said that was up to the board.
Now, eight months after it was discovered that excess government-insured deposits were being invested in high-risk derivative securities disguised as risk management hedges, the board has apparently found that the buck does stop with Dimon.
According to
The board may also feel pressure to take definitive action stemming from a
It is important to remember the "London Whale" incident did not happen in isolation. In addition to this improper investment of deposits and Dimon’s misleading material statement about "
It has also settled over allegations that
The bank has also been or currently is under investigation for similar
At the risk of restating the incredibly obvious, until the CEO of a major bank is held responsible for the bank’s misdeeds, those nefarious practices are likely to continue.
If the JPMorgan Chase Board docks Dimon’s compensation only for the London Whale’s trading loss, he should consider himself fortunate that they are so myopic.
Jim Wells is president of Wellspring Consulting International, a Florida-based consultancy specializing in expanding access to financial services for consumers who choose not to deal with banks.