I have railed before at how the big banks have been able to escape serious consequences for their acts that threw the global economy into turmoil and caused hardships for so many. While they have had fines levied against them, the Department of Justice and the Securities and Exchange Commission, the agencies entrusted with maintaining accountability, were satisfied to simply levy fines on the banks without threatening the senior executives with jail time, which would be the best way to deter future malfeasance. The fines themselves, even though large by normal standards, were usually just a few days’ profits for the banks that they could absorb as the cost of doing business.
What was worse was that those settlements did not even require the banks to admit wrongdoing. But the uproar of letting the banks get off so easily (judges were beginning to balk at signing off on such settlements) seems to have partially paid off. The government has just settled the ‘London whale’ case with JP Morgan Chase in which the bank agreed to pay a fine of $920 million (which makes up about thirteen days profits) but also admitted wrongdoing. This is a first, and a welcome development.
Next step: Let’s see some top executives being threatened with jail.