The Senate Permanent Subcommittee on Investigations has issued a report on the “London Whale” trades and JP Morgan detailing what it titles “A case history of derivatives risks and abuses.”
I could go through the entire report (and have read it) and detail each and every point of abuse and intentional obfuscation, but it’s not necessary to do so.
The key point take from this report, and the hearing that will be held today, is singular:
The conduct detailed therein is a criminal federal offense. So says Sarbanes-Oxley, a law passed after myriad false statements made by corporate executives in the 1990s left investors with big losses and the only retribution available was through civil suit for various alleged torts, including the collapse of both Worldcom and Enron.
Congress responded with a law that requires the CEO of a public company to certify that the financial reports issued by the company be truthful in all material respects and imposes criminal penalties for false statements.
This report, and the hearing to be held today, leave me with only one question: Where are the damned indictments and why should I or anyone else obey the law if our government will not prosecute behavior that it facially and clearly documents has breached these requirements?
Let me remind those in Congress and elsewhere who are commenting on this, including Cramer right now on CNBS claiming that there was “nothing criminal” — and are in doing so willfully ignoring SarbBox, which makes such conduct explicit crimes:
When there is no justice available through the courts there comes a point where the people will resolve the problem. It will be far messier and much less fair, but at its core it happens because those who are charged with meting out justice have refused to do so.
When that happens, and it will, I will charge the outcome against every media pundit who is claiming that there were “no crimes” along with every politician who has echoed that sentiment rather than demanding immediate and vigorous prosecution.