[bonemachine]

If they really though there was fraud,

The issue at hand (and for which JPMorgan was fined) wasn't whether they definitively knew, or "thought" there was a fraud or not. It was for specific violations of the Bank Secrecy Act: failing to report suspicious activity, and failing to create specific controls against money laundering.

All of the recent press articles are really quite clear about this. You may not agree with the SEC's findings of JPM's culpability in these charges; you may not be even particularly fond of the Bank Secrecy Act, for that matter. But you might want to do a little bit of research into what JPM was, you know, actually prosecuted for before engaging in engaging in naked speculation about how what JPM may have "thought" about Madoff's activities based on the extent to which one particular unit may have been shorting his positions.

[blah32497]

Does anyone else think it's kinda crazy that banks are required by law to act like policemen? Seems like that's the government's job.

[qq66]

Everyone is required to act like police to some extent. If someone comes into your sporting goods store looking to buy a baseball bat to attack his neighbor, you're required not to sell it to him (and in some jurisdictions, you're required to call the police).

[bonemachine]

Whatever, but that's not what the current legislation says.

Which JPM agreed to be in compliance with in order to be granted a license to go out and do this "banking" thing.