By Pam Martens and Russ Martens: September 29, 2020 ~
As the attention of Americans is focused on surviving the pandemic and the pivotal presidential debate tonight, William Barr’s Justice Department decided to quietly hand an early Christmas present to a notorious Wall Street bank.
Under the richly compensated leadership of Chairman and CEO Jamie Dimon, JPMorgan Chase, the largest bank in the United States, has admitted to an unprecedented five criminal felony counts since 2014 and put on criminal probation three times. Dimon notched two of those felony counts in his belt today. (That’s five felonies more than the bank pleaded guilty to in its prior 100 years of existence. Translation: this is not normal even on Wall Street.)
The bank has agreed today to pay criminal fines and admit to two felony counts of wire fraud for manipulating (spoofing) trading in the precious metals and U.S. Treasury markets. Why the Justice Department is bringing only two counts when its own charging document indicates that traders engaged in “tens of thousands of instances of unlawful trading in gold, silver, platinum, and palladium…as well as thousands of instances of unlawful trading in U.S. Treasury futures contracts and in U.S. Treasury notes and bonds…” is one more sign that this Justice Department is egregiously failing the American people and making a mockery of the word “justice.”
This Justice Department is not only defining deviancy down; it’s defining outrage down. Where is the U.S. Attorney’s voice announcing his resignation over this sellout of a deal?
The routine of charging the largest bank in the United States with felonies and placing it on a three-year probation is now so yawn-worthy at the U.S. Department of Justice that the prosecutors didn’t even bother to hold the usual press conference today to announce the charges and settlement. The Justice Department simply issued a press release and a Deferred Prosecution Agreement which both sides had already signed.
Sweeping the whole mess up and tying it with a tidy bow meant that the Securities and Exchange Commission and Commodity Futures Trading Commission also had to agree to the settlement, which they obligingly did.
Representing JPMorgan Chase as outside counsel were lawyers from Kirkland & Ellis (the law firm with which Attorney General William Barr was associated before coming to the Justice Department) and lawyers from Sullivan & Cromwell, where SEC Chairman Jay Clayton was a partner before taking the lead at the SEC. (See SEC Nominee Has Represented 8 of the 10 Largest Wall Street Banks in Past Three Years.)
The deal is so sweet for criminal recidivist JPMorgan Chase that it notes that “an independent compliance monitor was unnecessary” despite also revealing that the bank “did not voluntarily and timely disclose to the Fraud Section and the Office the conduct described in the Statement of Facts.” It was required to do that under its prior probation agreement that ended in January of this year.
Monetary fines were also imposed, consisting of the following: a criminal monetary penalty of $436,431,811; a criminal disgorgement amount of $172,034,790; and a victim compensation payment of $311,737,008. That brings to more than $37 billion the total that JPMorgan Chase has paid to settle allegations of fraud and ripping off Americans since the financial crash of 2008.
In a properly functioning Justice Department and bank regulatory system that genuinely wants to ensure the safety and soundness of America’s deposit-taking banks, Dimon would have been forced out when the bank admitted guilt to the first two felony counts in 2014 for its dubious role in handling the business bank account of Ponzi-schemer Bernie Madoff. If not then, perhaps the following year when it pleaded guilty to its role in a bank cartel (actually called “The Cartel”) that rigged the foreign currency market. In the Forex matter, the bank admitted guilt to one felony count and received a deferred prosecution agreement along with other banks involved in the matter.
In the rigging of the foreign currency market case, the Justice Department announced that agreement on May 20, 2015 but the U.S. District Court did not approve the agreement until January 2017. Thus, the clock did not start ticking on the three-year probation period until then. That meant that JPMorgan’s probation period began in January 2017 and ended in January of this year.
To be charged with two more felony counts in the same year your three-year probation ends is the strongest proof that Wall Street has become a fraud monetization system where deferred prosecution agreements and fines are simply the cost of doing business on Wall Street.
The Justice Department brought racketeering charges against three of the precious metals traders at JPMorgan in September of last year. It was the first-time veterans on Wall Street could ever remember a major U.S. bank having its traders charged with racketeering. The Board of Directors of JPMorgan Chase must have taken that as some kind of great branding for the bank: the Board gave Dimon a 1.6 percent raise for the year to a total compensation of $31.5 million.