Carl Levin is at it again. His Senate Subcommittee on Permanent Investigations, perhaps the best investigatory panel in Congress, particularly on financial matters, has honed in on JPMorgan Chase and the Fail Whale trades.
JPMorgan Chase & Co.’s wrong-way bets on derivatives are the focus of an escalating investigation by a U.S. Senate panel led by Carl Levin that has grilled executives from banks including Goldman Sachs Group Inc. and HSBC Holdings Plc, three people briefed on the inquiry said.
Levin’s Permanent Subcommittee on Investigations is seeking testimony from those who worked in or helped lead JPMorgan’s chief investment office, according to the people, who asked not to be identified because the inquiry isn’t public. The unit’s London staff lost at least $5.8 billion this year on the botched wagers, which were large enough to shift markets.
So, good news and bad news here. The good news is that Levin and his team really know their chops here. Their investigations against HSBC and Goldman Sachs were comprehensive and detailed, and painted a clear picture of fraud and illegality. The bad news is that the SPSCI is not a prosecuting authority. And we saw exactly what happened the last time, when they put together a dynamite Goldman Sachs report, referred it to the Justice Department, and they… did nothing at all with it.
There is the potential for Levin’s committee to really damage JPMorgan Chase reputationally with a deep-dive investigation. But sadly, it’s not likely to translate into action under the current DoJ. This investigation could take years to germinate, however, so maybe new leadership will strike a different pose, though I wouldn’t be hopeful.
The other piece of this is Levin keeping the pressure on while we await the final writing of the Volcker rule. Levin and Jeff Merkley authored that part of Dodd-Frank in Congress, and they want to see broad restrictions on the type of trading JPMorgan Chase engaged in. So an investigation into malfeasance could sway the regulators to ban certain types of activity, in a perfect world.




16 Comments

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Okay, this is a really good thought and something I can hang onto. I was thinking that the only product of an investigation like this would be a report and another set of “shitty deal” video clips. After the NDAA deal, my trust level in Levin is at an all time low. Of course this investigation could just be more red meat for the base and something designed to keep OWS from disrupting campaign events. And although it’s outrageous that we still don’t have an Volcker rule in place yet, this was an encouraging thought.
Though everybody who is paying attention has been waiting for a Wall Street related October surprise that either sacrifices somebody or gets a lot of media attention and then goes nowhere in the end (and after the election) which is the norm with this administration.
It’s been my impression that Levin under Obama, acts more as a figure head, talking tough until it’s time to actually do something, then like the bulk of Dem Senators, do nothing of substance or like their leader, act like the CAVEMAN©.
then the matter will be turned over to the doj for prosecution where it will be forgotten.
This is good, but it’s worth remembering this is the same Carl Levin who led the charge on NDAA, under which Americans can be permanently imprisoned without trial.
I promise I’ll keep holding my breath waiting for something positive to happen in D.C. No REALLY. I promise.
Nothing to see here folks…please move along.
The magic cufflinks will take care of all of Jamie’s problems. Works every time.
presstv.ir doing 9/11 special right now. I saw the end of it when it was broadcast earlier today and it is excellent.
Thanks for the post, and I appreciate the hard work and good writing going into it.
That said, someone please wake me when something, you know, actually happens…
got a link for that?
I think you’ve hit the nail on the head. Nothin’ real gonna happen.
Me too…..cough, cough.
After all those guys “swore” to uphold the constitution.
THey DID didn’t they?????
David, I haven’t said in a long time what a gresat job you are doin’.
Well, you are!
Ya’ know, it’s funny. Just saw Peter Noone and Herman’s Hermits last weekend. What a fabulous show. If he gcomes to your town go see him.
This all brings to my mind, “Second verse, same as the first”.
And, btw, at the end of the multitude of choruses he sings with the crowd, he says to the audience, “At this point in the show you just can’t imagian how much I regret not having written a second verse that song.”
He’s really funny!!
Every time I try that I wind up unconscious. Who is this Carl Levin creature mentioned in the article?
Nobody fucks with Jaime Dimon ,He controls circa $90trillion in derivatives ,and circa $70 trillion in interest-rate swaps,which means he can short the latter and hence invest in a future he has the power to create .Ask all the municipalities who got fucked by betting rates would go higher .These suckers bet on illusory market forces without realizing they were betting against the house,i..e.Jaime and Ben .Master Dimon owns us all ,so long live the king of libor rigging and his little mascot ,the entire U.S. political class .