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November 25, 2013

Financial Reform Friday Newsletter – 11/22/2013

Financial Reform Friday Newsletter
November 22, 2013
Don’t be fooled: DOJ’s actions prove that the settlement with JP Morgan Chase is indefensible. Seeking to avoid public scrutiny and accountability, DOJ won’t disclose the most basic information about JP Morgan’s illegal conduct: exactly what they did in which case; what executives, supervisors and staff were involved; how much investors lost; and how much profits they made. Better Markets wrote to U.S. Attorney General Eric Holder and New York AG Eric Schneiderman, demanding transparency and disclosure so that the American public could see for themselves whether the settlement was fair or not. The $13 billion settlement finally announced this week is worse than feared. DOJ bragged about the big settlement number, while using it to distract attention away from its failure to inform the American people of the facts so they can see if the bragging is merited. Worse, DOJ, in its zeal to try to convince the public that it’s tough, misrepresented key terms of the settlement, raising the question, why believe what the government is saying about JP Morgan.
CFTC beats back Wall Street’s latest attack on financial reform. Wall Street’s latest attack in its ongoing war on financial reform was an overheated response by the industry to a recent CFTC cross-border derivatives advisory. Issued last week, the advisory confirmed that individuals making derivatives trades in the U.S., even if done on behalf of overseas affiliates, are subject to U.S. financial reform laws. The CFTC was right to reject Wall Street’s latest attempt to evade financial reform and right to ensure that risks from abroad do not come back to the United States and crash our financial system again.
Meeting with regulators and fighting for a tough Volcker Rule. Better Markets continues to meet with regulators and push for a strong, enforceable Volcker Rule that effectively bans the too-big-to-fail Wall Street banks from proprietary trading. As pressure builds on regulators to meet Treasury Secretary Jack Lew’s year-end deadline to implement the rule, Wall Street and its allies like the U.S. Chamber of Commerce have pushed for the rule to be re-proposed, three years after it was initially proposed. As our letter to regulators detailed, the Chamber’s claims have no meritThe Volcker Rule is narrow in scope and limited in application and must be passed as quickly as possible to protect the American people.
The revolving door spins for Tim Geithner. Last week, Warburg Pincus quietly announced that former Treasury Secretary Timothy Geithner joined the private equity firm as its president. This latest spin through the revolving door from Washington to Wall Street continues to erode public confidence and trust in government and government officials. Geithner has unique knowledge and experience overseeing the financial industry, shoveling taxpayer money to Wall Street with no accountability or conditions. With a complete lack of experience in private equity, but with a full rolodex of Washington powerbrokers, Geithner’s move gives the industry even greater access and influence at the highest levels of government.
@BetterMarkets Tweets of the Week on JP Morgan Settlement
Shocking level of access by #JPMorgan & #JamieDimon calling cell phone of top #DOJ officials to stop lawsuit?
@kevinwack & who wouldn’t want the sweet #JamieDimon deal that has paid off big for #JPMorgan, as we detailed here:
@JonathanWeil Totally right. The failure to disclose basic info must mean it’s an early Christmas gift to #JPMorgan
What others are saying about the JP Morgan/DOJ settlement: 
Bottom line on JPMorgan’s $13-billion settlement: not nearly enough: The Los Angeles Times by Michael Hiltzik 11/19/2013
J.P. Morgan Is Haunted by a 2006 Decision on Mortgages: The Wall Street Journal by Devlin Barrett and Dan Fitzpatrick 11/20/2013
When $13B is less than meets the eye: NY Daily News by Nomi Prins 11/22/2013
The JPMorgan Settlement Isn’t Justice: Bloomberg by Jonathan Weil 11/22/2013
Cost Aside, JPMorgan May Have A Good Deal: The New York Times by Peter Eavis 11/20/2013
Some other things that might be of interest to you: 
Obama’s First-Term Finance Team: Where Are They Now?: The New York Times by Michael J de La Merced 11/18/2013
In Obama’s Wall Street-friendly cabinet, a clean sweep for finance: Columbia Journalism Review by Ryan Chittum 11/16/2013
How Warren Breaks the Mold as Freshman Senator: American Banker by Victoria Finkle 11/17/2013
Top 13 investment banks’ profitability comes under fire: Financial Times by Patricia Jenkins 11/20/2013


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