And Now We Know…The Truth About JPMorgan

JPMorgan Knew - Madoff

Wallstreetonparade.com asked back on December 31st:

“Why did the Justice Department Kill the Madoff Subpoena Against JP Morgan?”

Justice refused to enforce the subpoena, which was ignored by the bank.  Behavior that, were you or I to do it, would lead to our arrest and probable imprisonment.

Now we know:

Working through a long list of legal problems, JPMorgan Chase is starting the new year with another steep payout to the government.

The bank plans to reach as soon as this week roughly $2 billion in criminal and civil settlements with federal authorities who suspect that it ignored signs of Bernard L. Madoff’s Ponzi scheme, according to people briefed on the case.


Uh, yeah.

You mean you can hang onto someone’s bank account for a couple of decades, know that they’re allegedly writing covered calls against positions as their investment scheme (after all, it’s published all over the place and thousands of clients are customers) and yet not one transfer takes place to or from the accounts to actually buy stocks, write the calls or settle them at or near expiry?

Riiiiiight.  And this means that someone would “suspect” that the claimed strategy is not really being used.

Suspect?  That’s sort of like deciding to bang a hooker, sticking it in, a week later your schlong blows up to the size of a football and you suspect you might have an STD.

C’mon people.  This sort of behavior is evidence of racketeering, in that dozens if not hundreds of people either knew what was going on or deliberately didn’t look because they knew what they were likely to find.  If you run an air cargo outlet and advertise “we don’t look, we don’t care” you’re going to prison when you become the major cocaine pipeline into the United States.

The real danger from this crap, as it was with Wachovia-cum-Wells (that was willfully moving drug money around in huge quantities) is that if the law is exempt from certain people at some point in time the ordinary folks who go to prison for this conduct will decide they’ve had enough and start organizing into groups and hang the responsible parties — and probably resist any attempt to enforce the alleged consequences for that too.

If you’re interested in a civil war, folks, allow this to be “how business is done” is exactly how you get one.

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