[elecengin]

I think it's important to recognize that all this happened on the fringes of JPM - this appears to be some private wealth branch office. Small brokerage outposts like this are generally rife with issues - they have less supervision (frequently a single broker with their supervisory license) and even in better supervised conditions brokers spend the majority of time out of the office and away from the eye of compliance. Compounding the issue is older brokers who are used to different norms in the business - which explain some of his complaints on the broker's FINRA record: more aggressive selling (his suitability complaints), phone orders (the late order entry complaint), etc. Even though he was vindicated, this type of record is common for brokers in these roles. I suspect that is why they chose these specific trumped up charges against him.

I am waiting for the article that tackles the issues at these branch offices head on.

[leereeves]

Is it really limited to the branch offices?

Over the years, JP Morgan has been fined $35 billion.

http://www.dividend.com/dividend-education/a-brief-history-o...

And that's just for the cases the government caught and proved.

[HiLo]

Some of those things have been for things that weren't even illegal. The dance between Wall St and regulators is a delicate one, and shouldn't really be viewed in the same way as your everyday civil case.

[RodericDay]

They also probably haven't been fined for things that actually should be illegal, just because it's hard to write regulation that captures otherwise obvious ill-intent.

I honestly will never understand this kind of apologia.

[leereeves]

Which were for things that weren't illegal?

[JackFr]

> And that's just for the cases the government caught and proved.

"caught and proved" can also be read as "alleged and settled". In virtually every one of those cases, nothing was "proved" in a court of law. Allegations were made, and JP Morgan agreed to a settlement. They are certainly not guiltless, but it is far less cut and dried than you make it out to be.

[steven2012]

This is nonsense. $35B is certainly enough money to stop and fight for, if they thought otherwise. The idea that "nothing was proven" is preposterous, they are certainly guilty not just "not guiltless".

[cmdkeen]

No, it really isn't. It is just money, an actual judgement, especially these days, can lead to actual market bans which is then a death sentence for the firm. The flip side of this is that US governments (Federal and State) are able to effectively shake down large financial firms for very large sums of money without actually holding any individual to account - it just becomes part of "doing business".

I'm not in any way saying that JPMorgan doesn't deserve some/all of those penalties but don't mistake what has happened to them for justice.

[saiya-jin]

working in private banking, can confirm this is very true. regulators(=government) can shut you down in a minute, for a single action taken by a single employee, who somehow manages to break all possible rules in the company. the environment changed drastically in last 8 years (in many ways in good direction for customers, but it certainly raised costs massively, and guess who pays these costs)

[pizza234]

A "certain famous bank" got away with no criminal indictments, after having committed all sort of crimes, including recycling money for drug cartels.

It's been publicly stated that (cough cough) if such bank would have lost the license, it would have been too much of a big hit for the economy (cough cough).

So, to say that regulators "can" shut a bank down in a minute is true, but disingenuous to say the least.

[DanBC]

It is well known that tax regulators prefer to settle out of court, to avoid lengthy and very expensive court cases.

Out of court settlements allow them to get some of the tax back; put a bit of pressure on the trading entity; and not force closure of that trading entity which would probably cause some disruption.

I think that's the wrong approach because those trading entities have shown that they continue to break the laws where they want to.

[EdwardDiego]

Why would you settle in court when you were innocent? I consider agreeing to a settlement to be akin to a statement of guilt, but you don't? Why not?

[nickff]

The fights are often more expensive than the settlements, and these settlements have gone from a rare black mark to being a cost of doing business.[1]

Similar discussions are common in the criminal law, and it is well-known that a large number of people plead guilty to crimes they did not commit; people do this because the costs to themselves and to their families are much higher if they fight the charges than if they just plead guilty.

[1] http://www.ft.com/cms/s/0/802ae15c-9b50-11e3-946b-00144feab7...

[JackFr]

In the criminal law there is a big difference between accepting a plea bargain, which generally involves the accused allocuting in open court and admitting to wrongdoing, and pleading no contest which is specifically not an admission of guilt, but a pragmatic decision that the costs borne fighting the charge outweigh the benefits.

[worldadventurer]

Quoting littletimmy above: You mean to say JP Morgan is appointed a lowly paid public defender and intimidated into a plea deal?

[throwaway2048]

lawyers fees dont cost billions (yet)

[JackFr]

You'd be surprised: http://www.thewire.com/business/2014/04/heres-how-much-ameri...

[lostlogin]

It probably doesn't apply to this case, but surely you have heard of people settling rather than face an expensive and focus draining fight?

[littletimmy]

Please stop with this nonsense apologia. If JP Morgan was not guilty it would fight at least one of these many cases in court. Virtually every time they settle, which means they are either guilty or the settlements are so low that they don't matter.

[roel_v]

Lol, just like all those other people who are offered plea bargains and take them? They all guilty, right, otherwise they'd fight in court?

[throwaway2048]

i somehow doubt jp morgan lacks the means to fight them

[littletimmy]

You mean to say JP Morgan is appointed a lowly paid public defender and intimidated into a plea deal?

[wealthmanager6]

Valid point except I worked at the largest wealth management firm in the world in a major office.

Cocaine, hookers, money launderering, investment in drugs, executives selling (small amounts) of drugs and all kinds of related craziness.

People are people, and we are a flawed bunch.

[NickHaflinger]

"I think it's important to recognize that all this happened on the fringes of JPM"

Disingenuous excusing :)

[nickbauman]

Maybe related: A top salesperson's commissions often makes them one of the highest paid persons in the org chart. Upper management always ends up thinking they can be replaced with cheaper people. So it gets very classically political.

[tankenmate]

And it's not just salespeople, a number of early stage engineers at Zynga were cut out of their equity / options entitlements by being relieved of duty just before the IPO; "got to be in it to win it" clauses in their employment contracts enabled this.

Point in lesson, always make sure accelerated vesting (equity, options, bonuses) clauses for not at fault firing, retrenchment, redundancy are in your employment contract.

[johnz133]

Can confirm. Friend of mine was cut out of a seven figure bonus weeks before the payout. Apparently he had no recourse legally either.

[HiLo]

This is a good point. Professional firms where the company is really tons of smaller companies sharing a balance sheet are always tough to wrap your head around in general.