JPMorgan Facing New Investigation, Citigroup And HSBC Set Aside Funds For Legal Problems
Another day, another exposure of criminal activity on Wall Street. Too Big To Fail/Jail bank JPMorgan is once again under investigation, this time for its conduct in the foreign exchange (forex) market. The Department of Justice probe is reportedly going to cost JPMorgan billions adding to an estimated $5.9 billion in total legal costs at the moment. JPMorgan is said to be cooperating with regulators and that the investigations are focusing on its” foreign-exchange trading activities and controls related to those activities.”
But JPMorgan is not the only big bank setting aside large sums of money for legal expenses. Both Citigroup and HSBC are expecting to have to pay out hundreds of millions of dollars in legal costs related to their criminal conduct. The government, rather than criminally prosecute the banks and executives who broke the law, often accepts cash payments instead which are rapidly adding up as the crime spree continues.
J.P. Morgan also said the amount it may lose related to litigation in excess of its legal reserves could be as much as $5.9 billion as of Sept. 30, up $1.3 billion from the $4.6 billion it reported three months earlier, according to the regulatory filing. It isn’t clear how much of the increase comes from the intensifying currency probe…
Citigroup set aside an extra $600 million in legal provisions over what it had already budgeted for the third quarter. It said the extra expense resulted from “rapidly-evolving regulatory inquiries and investigations.”… HSBC Holdings PLC on Monday said it set aside around $1.7 billion to cover one-time charges, including $378 million to cover a potential settlement in the U.K.’s Financial Conduct Authority’s probe of foreign-exchange markets.
Though the probe into the forex criminality is relatively new, prosecutors are already tearing up and revisiting old legal settlements with the Wall Street banks due to the banksters refusing to live up to the settlements. Which begs the question – why keep pretending these settlements do anything? Really these legal settlements are just corruption tolls now, the law is not just being broken it is broke.
If only these banks had some kind of incentive to follow the law other than possibly having to pay out a fraction of their take to the government in no-fault legal settlements. If only there was some kind of building you could put people in who broke the law – to make them and their collaborators think twice about breaking it in the future. We could call it prison or something. How novel. How radical.
Image from Royboy under fair use.