http://market-ticker.denninger.net/archives/1578-JP-Morgan-And-Alabama-Swaps.html
Yeah I know this is a repeat, but Karl says it so much better and is just as disgusted by the idea that corporate crime is just paid away as if that's all that can be done to chase away the vultures that feed on live prey.
But I see that something can actually be really done to stop them and now have to wonder why it hasn't been.
They can be stripped of their corporate charter. Deals like the Alabama swaps deserve a little more than the slap on the wrist fine that Morgan allowed to receive.
Amazing story here.... you really need to read the whole thing. The salient point is here:
The county paid JPMorgan and a group of banks $120.2 million in fees for $5.8 billion of derivatives, according to a series of stories published by Bloomberg News in 2005. The payments were about $100 million more than they should have been based on prevailing rates, according to estimates in 2007 by James White, an adviser the county hired after the SEC said it was investigating the deals.
That's six times what they should have cost - that is, six hundred percent of market price or a 500% overcharge.
Must be nice eh? What did they do to get this? Allegedly:
The SEC alleged that JPMorgan, Charles LeCroy, the banker who pitched the refinancing to Jefferson County, and Douglas MacFaddin, the former head of the New York-based bank’s municipal derivatives desk, made more than $8 million in undisclosed payments to close friends of county commissioners. The associates owned or worked at local-broker dealer firms that didn’t do any work on the deals, the SEC said.
Not bad. Pay $8 million in kickbacks and get $100 million in overcharge. The allegedly-bribed weren't very good negotiators - you'd think they would have gotten half, right?
And again, we settle for a fine and of course admit no guilt.
