Saturday, July 5, 2014

COMMENT BY JIM DUBBS ON MY JPMORGAN CHASE POSTING

NOTE:  (I'm posting Jim Dubbs' comment below as a new post because it exceeds the 75-word limit on Phronesis on-post comments.  We will customarily do this when comments exceed 75 words.

Is it not also possible that historic size of these immense fines that were imposed and agreed to resulted precisely because the Feds know that it is not likely that any individual banker would be prosecuted, or even less likely, convicted?  A possible metaphor: UPS trucks are routinely issued tickets for (double) parking violations in Manhattan, while a small company truck equally violating the law is not likely to get a ticket.  The cops know that the company UPS, not the driver, pays the fines, while the driver of the small company's truck usually has to pay his own ticket.  I suggest that it is this knowledge about who pays the fine that determines who, or more accurately, what is ticketed in the first place.   And both cops and truck drivers are ultimately just working men, who can be sympathetic.

If criminal prosecution were pursued maybe there would be much lower or no fines for civil malfeasance.    It's likely a necessary trade-off; plus criminal acts are harder to prove given the more stringent rules of proof.

The sinister and simple reason: Like the working men cops and drivers, the persons on both sides in these financial cases all come from the same community.  Just consider the many former members of banking and securities enforcement agencies who end up working for firms they once were investigating.  One man's ADA is likely to become another man's corporate counsel.  (Or to quote that eminent American jurist, H. Rap Brown's definition of justice, "Just us white folks.")

Jim Dubbs

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