Failure of supervision and policies et alia.

“J.P. Morgan Set to Agree To Big Fine For ‘Whale'” Wall Street Journal, September 17, 2013 A1.

J. P. Morgan is a big topic lately, as are the numbers for the fines for the London Whale debacle.  It has been the topic of an earlier post.

A slightly different take here.  The settlement is based on the alleged failure to supervise a couple of traders and the failure to have sufficient internal policies to prevent the cover up.  Apparently top management gets a pass for telling investors stuff that wasn’t true, and the investors get the bill.

I am struck by the application or not of the Federal Sentencing Guidelines, and the decision not to charge the company or its employees with a federal crime.  18 USC Sec. 1519 is must reading for anyone in a business heavily regulated by the government.  Why isn’t it used more?  Too big to fail is one thing, but too big to be charged with a crime?  How will others learn?

Similar question as to why no 1519 charge against Halliburton for destroying cement tests post BP’s oil spill.  The list goes on.


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Filed under Duty of Care, Policy, Requirements, Risk

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