Get Derivatives Out of the Dark

Will the financial world change because district attorney Preet Bharara has charged a couple of key employees at JPMorgan Chase (JPM) with fraud and a conspiracy to hide losses? I am a huge believer that every single prosecution of financial fraud is a deterrent. Anything that makes potential fraudsters think twice about falsifying numbers is a win for you, me, for everyone. It's terrific that the government is pursuing this kind of activity which, frankly, really isn't any different from a division within a company keeping two sets of books.

Now, it is very easy to suggest that the whole enterprise must be corrupt. It is true that JPMorgan totally screwed up here. Mistakes, misjudgments and terrible decisions were made throughout the organization. I do think, however, that this is important to point out: When JPMorgan found out about the second set of books, it did go to the authorities and said, "Please investigate this issue." A corrupt organization does not do that. The actions of JPMorgan itself and its top executives wasn't criminal. It was just stupid, and you can't prosecute people for stupidity....577 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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