Saturday night at 9:00 PM/EST Bloomberg will air an extra special episode of “Political Capital with Al Hunt,” his guest is none other than Senator Elizabeth Warren (D-MA), and she had some fairly blunt things to say about JP Morgan’s CEO, Jamie Dimon.
Warren was elected on crusading against Wall Street malfeasance, and JP Morgan is Wall Street’s bad boy right now. The bank has paid $US20 billion in legal fees to the government over the last year — that’s enough to pay the New York Yankees for 2o years — and just this week paid out $US1.7 billion for failing to alert authorities of their former client, Bernie Madoff’s infamous decades long Ponzi scheme.
What’s more, knowing that Madoff was a fraud, JPM got rid of their $US275 million exposure to Madoff shortly before he was arrested in December 2008.
When asked whether or not Jamie Dimon should be replaced as a result of these issues, Warren said: “Look, the real question is, do you have somebody who has shown they understand there were problems in the past and that they have a different plan going forward? What JPMorgan Chase and the other large financial institutions have done is they have continued to get bigger and bigger and load up more and more on risk…I’m waiting for him to demonstrate that understanding… And he’s had a long, long time.”
One thing Dimon can understand, however, is the health of his bank. JPM’s shares are up 28 per cent over the last 12 months, and analysts expect the bank to have pulled in $US23.4 billion in revenues when it reports Q4 earnings next week — a small improvement from Q3, and more than any other big bank.
So JPM can handle the lawsuits in stride, but Warren cannot. Just this week, after JP Morgan’s settlement, she teamed up with Senator Tom Coburn (R-OK) to introduce a new bill called the Truth In Settlements Act.
Basically, it would require the Justice Department and other agencies handling settlements against corporations to be transparent about their negotiations, and make agreements easy to find online (you can watch a video of her speech on the floor of the house below).
Under this new law, regulators and law enforcement agencies would still be able to use confidential settlements, but companies would have to disclose how often they are used and why.
Now, since the Justice Department has said that it’s going to continue going after not just JP Morgan, but also other Wall Street banks for issues dating back to the financial crisis, it’s easy to see where Warren’s coming from with this bill. The New York Times reported this week that Wall Street banks could pay up to $US50 billion to “buy peace” with the government.
“When you dig below the surface, settlements that seem tough and fair can look like sweetheart deals,” said Warren. “If we expect government agencies to hold companies accountable for breaking the law. Then we the public must be able to keep agencies accountable for enforcing the law. We can’t do that if we’re kept in the dark.”
Watch the video of her presenting the bill below:
Business Insider Emails & Alerts
Site highlights each day to your inbox.