| HN Mirror

I think you're framing the situation incorrectly. Wall Street is at a state of regulatory capture. Sorry I'm not an SEC apologist, but from what I've seen they walk a fine line between incompetence and brilliance. Everyone on Wall Street makes 'mistakes', and that's because individuals make decisions but there are more rules/laws/best practices than an individual can know. When everyone is operating under prosecutorial discretion, the law disappears, and it's cheaper to cut in, see regulatory capture, your oversight than it is to attempt compliance. Though the litigation industry on wall street might have a bone to pick here. The problem for Dimon is that capture is industry wide, not by an individual or company, as in the case of GE or the big three.

Lets take a real example. Bad things happened in 2008. Congress has to come in and 'clean up'. But Congress is a second order proxy for Wall Street, so clean up means they have to figure out a way to look good to their 'voters' while not putting any of their 'donors' in jail. This is harder than it seems. They tried for a few years to do nothing, because it was 'confusing' and 'complex', people weren't buying it. There was seriously bad mojo for congress, that could possibly threaten a reset on regulation for the entire financial industry. So they needed to find a scapegoat. A few congressmen were pissed at having their hands tied, and Dimon is probably the most visibly brilliant guy on wall street, and he had pissed people off, so he was chosen to be thinned from the heard.

What surprises me is that they haven't stopped. this is probably due to dimon's success, if he had been a little less competent in the intervening years, my bet is he would be less under the gun now. Still this is a valuable lesson to all of us paying attention.