Pros and Cons of Criminal Charges on JP Morgan
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28th November, 2013
It all started during 2006 when the US Justice Department came up with discovery of meeting of JP Morgan Executives where despite of red flag signals from US department, the officials continued selling shoody mortgage securities. JP Morgan- one of the largets banks in US, came to mutual agreement with US Government Officials to pay $13 billion as part of civil settlement against charges over JP Morgan. (Barrett, 2013). The record penalty was the result of investigation held by Securities and Exchange Council and US Justice Department where they found that the big national banks were responsible for fueling the financial crisis. As for JP Morgan, where they acknowledged that indeed it told its investors about the mortgage loans in securities it packaged and sold although they were told by its employees of its loan quality, this gives a valid proof that national banks were indeed responsible for mortgage meltdown. However, these criminal charges on JP Morgan had both pros and cons in its own sense for the financial world and big banks.
Pros:
1)No one is above the Law:
After the time of financial crisis, JP Morgan was not the only national bank in US which got involved in trade of toxic loans related to mortgage. Before JP Morgan, it was Goldman Sachs-another large US Bank that faced the allegation of manipulating the trades in its own self interes, ended up in favor of SEC while GoldMan Sachs were asked to pay $500 Million during late 2011 in a deal called Abascus 2007-AC1 where the bank were alleged to mislead its investors on a deal related to Collateral Debt Obligation(CDO). (Eaglesham, 2011) The ab...
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Oct 1993. Retrieved November 18, 2010. Vol. 79. 134 pages (Document ID: 0747-0088) Published by American Bar Association
Author Unknown (1994). The Federal Reserve System: Purposes and Functions (5th ed.) Published by Library of Congress
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