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Once again, Jamie Dimon, JPMorgan Chase’s chief executive, has demonstrated how out of touch Wall Street is with Main Street . This time, Dimon is complaining that banks are “under assault” by regulators who are investigating corrupt practices and fraud. In Dimon’s world, the multiplicity of federal government investigations into JPMorgan’s alleged wrongdoing is un-American.
In actuality, it has been investors – America’s police officers, nurses, teachers, retirees and millions of others – who have been under assault. Their retirement investments have been plundered, their power rates have been manipulated and their mortgages have been subject to scandalous banking practices. It’s only due to the efforts of regulators -- and the whistleblowers who are often behind them -- that the world is seeing what is likely just the tip of the iceberg of massive and systemic fraud in the financial services industry.
Dimon let loose with his complaints about banking regulators in a conference call recently with reporters. He is quoted as saying, “In the old days, you dealt with one regulator when you had an issue, maybe two. Now it’s five or six. It makes it very difficult and very complicated. You all should ask the question about how American that is. And how fair that is.” Apparently, Dimon yearns for the times when the bulge bracket banks could break the rules and not get caught.
While those days are not over, they are becoming less common. Wall Street whistleblowers are stepping forward in record numbers, providing insight and expertise about wrongdoing in the financial sector. In the last fiscal year, 3,847 tips from whistleblowers alleging wrongdoing were provided to the Securities and Exchange Commission and the Commodity Futures Trading Commission. The SEC and CFTC have been very responsive in investigating whistleblower information. Investors are benefiting as a result.
For Dimon to question how “American” it is for his company to be investigated by various agencies is even more galling. He doesn’t question how “American” it is for banks to manipulate LIBOR, foreign exchange markets and electricity pricing -- practices that JPMorgan has been accused of engaging in and has faced enforcement action and fines as a result. Dimon apparently is suggesting that it would be more American for regulators to ignore such allegations of serious misconduct.
Every day in my job, I hear details about sophisticated, well-hidden frauds against investors that only insiders could understand and uncover. It seems that no matter how many government investigations and fines, banks continue to find new ways to make money through practices that break or skirt the law and hide their wrongdoing behind complex, opaque transactions. As long as Dimon and others on Wall Street view legal compliance as a “catch me if you can” exercise, investors should be thankful that federal regulators and whistleblower insiders are there to help protect them.
Imagine the results if Wall Street’s CEOs were to put the same energy into creating a corporate culture that places compliance with the law on par with profits. Dimon, for his part, could send a powerful message to his employees and the rest of Wall Street by showing a zero “fraud tolerance,” rather than whining about efforts of regulators to enforce laws once the banks are caught.
Jamie Dimon: Following the law should be the “American” way to do business.
