[HN Gopher] JPMorgan Admits to Widespread Recordkeeping Failures...
___________________________________________________________________
JPMorgan Admits to Widespread Recordkeeping Failures, Agrees to Pay
$125M
Author : DocFeind
Score : 167 points
Date : 2021-12-17 18:01 UTC (5 hours ago)
(HTM) web link (www.sec.gov)
(TXT) w3m dump (www.sec.gov)
| VWWHFSfQ wrote:
| So the question is how much money they concealed by those
| widespread recordkeeping failures. I'm assuming it's more than
| 125 mil
| onemoresoop wrote:
| You bet, 125 mil is just cost of doing business.
| alexfromapex wrote:
| I'd like to know why they get these small slaps on the wrist
| too. $125 million for them is like a person with average wealth
| being fined $20.
| AlexTWithBeard wrote:
| JPMorgan's annual net income is about $30bn. $125 million is
| roughly 0.5%, which is equivalent to $500 fine for a person
| making $100k per year.
|
| It's probably still a slap, but I'd say a pretty significant
| one.
| munk-a wrote:
| Proportion of revenue is a bad measure for this reason -
| costs don't scale proportionally. The rent, food and
| utilities you're siphoning out of that 100k along with all
| the incidental costs on top of it don't really apply evenly
| as revenue increases. As someone making right around 100k
| I'd say that 500$ is a big enough penalty that I'll notice
| it but if it was a one-off (like this one was) then I'll
| shrug and eat it. For instance if I were getting my
| bathroom remodeled and wanted to install some nifty
| european shower head that's against code... I'd probably be
| alright with the 500$ surcharge.
| AlexTWithBeard wrote:
| Applying human measures to corporations is a bit of a
| stretch in any case.
|
| That being said, as a government you want to milk this
| cow, not slaughter it.
| AlexTWithBeard wrote:
| I cannot say exactly for this one, but with the LIBOR scandal
| numbers were probably not that high.
|
| LIBOR was probably manipulated by 1 basis point (0.01%), give
| or take. Even with $1bn notional deal, which is a very large
| one, the difference would be $25k for 3 month payment.
|
| I mean, well, it's still pretty good money, but it's not like
| they made a couple of trillions and only paid a mere half-a-
| billion in fine.
| lordnacho wrote:
| I traded swaps during the period that this was happening.
| Keep in mind there's a LIBOR settlement every day. Also,
| there would be non-linear products on it, too. I'm not sure
| about 1B being a very large amount either. I've heard of
| individual traders who swung a dv01 of $20M.
| cm2187 wrote:
| And actually what matters isn't the daily libor fixing, it
| is the fixings used for the future expiries, 4 times a
| year. I believe that's the ones that were heavily
| manipulated (by some faction of a basis point but on huge
| notionals), because you hedge with a single future
| exposures over a number of dates.
|
| It is rather the impact on every day borrowers that was
| tiny. First they would have to be unlucky enough to have
| their libor fixing falling on one of these 4 dates, even if
| it did, the impact would likely be a rounding error.
| lordnacho wrote:
| I'm not so sure. I sat on both futures and swaps desks.
| Certainly a lot went through the futures on those 4
| dates, but the swaps business was OTC, settling every
| day. I could easily see someone with varying settlements
| pushing it conveniently their way every day. Each
| customer would lose a little bit but put it down to
| noise.
|
| Interestingly I also did FX and people got done on that
| as well. There's this daily fixing that's used for a
| variety of products, and a big player like a bank would
| have a daily delta that would be very nice to nudge the
| right way each day. You could actually see at 1630 each
| day that something odd was going on, and there'd be a
| rumor to go along with it on the squawk box.
| delaaxe wrote:
| I can't believe for one second that LIBOR was only
| manipulated for one bip at a time.
| bidirectional wrote:
| Well that was the case. Multi-bp LIBOR moves are pretty
| rare outside of exigent circumstances and the mechanics of
| doing so would be pretty tricky given that outlier
| submissions are thrown out. Wilmott had a good article
| recently on the mechanics of the manipulation [1].
|
| [1]: https://wilmott.com/the-libor-fix/
| cm2187 wrote:
| There was two distinct manipulations.
|
| The first one occured before the crisis. Swap traders
| asking money market traders to round their libor submission
| "the right way". That number got averaged across multiple
| banks, and the impact on the final fixing was likely of the
| order of a basis point or perhaps a fraction (per the
| regulator's report). 1 basis point may be small, but is a
| lot of money to an individual swap trader given the sort of
| position they must have had on libor futures (and that's
| money to the trader, not necessary to the rest of the bank
| who may have a net position the other way).
|
| The second manipulation occured at the height of the
| financial crisis and is of a different nature. Because
| banks contributions to libor fixing were public, investors
| were infering from the submissions whether a bank was
| struggling to fund itself. At the height of the post-lehman
| panic, some banks decided to lower their submission to not
| look weak. In this case the order of magnitude would be
| much higher, in the 10s of basis points. You could argue
| the banks had a financial gain, but not from the direct
| impact on libor (it wasn't clear what their position was,
| though banks tend to be typically net receiver of libor),
| rather from the perception of not being in distress to
| investors.
| mcguire wrote:
| How many $1B deals did JPMorgan have?
| AlexTWithBeard wrote:
| My guess would be that their USD rates book is about
| $10trn.
|
| That being said, pretty much by nature of the deal the book
| is hedged - precisely to limit the exposure to LIBOR
| movements.
| bidirectional wrote:
| The problem is that it's basically impossible to know. I'd
| imagine the vast majority of infractions were just employees
| improperly communicating privileged information via Whatsapp or
| whatever, without gaining any real advantage by doing so.
| munk-a wrote:
| The government decided that these record keeping failures
| were serious enough to warrant a hundred million dollar fine.
| We've all seen how fines lean toward slaps on the wrist so I
| would be pretty hesitant to assume the multi-million dollar
| one here was just because someone was DMing something that
| needed to be sent over a secure channel.
| nickff wrote:
| > _" The government decided that these record keeping
| failures were serious enough to warrant a hundred million
| dollar fine."_
|
| The SEC likes to go after these sorts of settlements, as
| they can post large dollar values without having to prove
| any actual harm. On the other side, these settlements are
| so common that they're just a cost of doing business,
| basically a tax.
| paulpauper wrote:
| $125m is a like parking ticket for them
| mcguire wrote:
| In Sep. 2021, JPMorgan had $738.57B cash on hand.
| hammeiam wrote:
| Well now they've only got $738.45B on hand, that'll show 'em!
| xyst wrote:
| $125M can be found in-between the couch cushions at JPM offices
| vamega wrote:
| I think this practice is widespread in finance. I'll not be
| surprised if other firms get fined next!
| [deleted]
| samaman wrote:
| You'd have thought that that Quorum blockchain would prevent such
| things..
| evanpw wrote:
| A company being fined for failing to surveil employees' personal
| email and text messages would get very different comments here if
| it wasn't a bank.
| AlexandrB wrote:
| I read the below more as the company failing to enforce a
| policy of employees using business accounts/devices for
| business communication rather than the company failing to
| surveil private accounts. Basically, employees should be using
| "official" communication channels that can be audited for
| business communication and save WhatsApp for friends and
| family.
|
| > As described in the SEC's order, JPMS admitted that from at
| least January 2018 through November 2020, its employees often
| communicated about securities business matters on their
| personal devices, using text messages, WhatsApp, and personal
| email accounts. None of these records were preserved by the
| firm as required by the federal securities laws. JPMS further
| admitted that these failures were firm-wide and that practices
| were not hidden within the firm. Indeed, supervisors, including
| managing directors and other senior supervisors - the very
| people responsible for implementing and ensuring compliance
| with JPMS's policies and procedures - used their personal
| devices to communicate about the firm's securities business.
| nerdponx wrote:
| False equivalence.
|
| > its employees often communicated about securities business
| matters on their personal devices, using text messages,
| WhatsApp, and personal email accounts. None of these records
| were preserved by the firm as required by the federal
| securities laws. JPMS further admitted that these failures were
| firm-wide and that practices were not hidden within the firm.
| Indeed, supervisors, including managing directors and other
| senior supervisors - the very people responsible for
| implementing and ensuring compliance with JPMS's policies and
| procedures - used their personal devices to communicate about
| the firm's securities business.
| mathattack wrote:
| They have to do this by las. Part is to "run the tapes" is
| there is a customer disagreement, and part is records keeping
| for compliance purposes. (Anti-Money Laundering, making sure
| transactions have economic substance, etc) In the aftershock of
| 2008 it came to light that much of the illegal behavior
| happened when people switched to personal devices.
| odiroot wrote:
| I would also like to pay just, let's say, 10EUR whenever I break
| the law.
| kahrl wrote:
| ...by stealing 20EUR.
| ushakov wrote:
| i bet they're still in profit
| dgs_sgd wrote:
| So as per the article "JPMS further admitted that these failures
| were firm-wide and that practices were not hidden within the
| firm". This is a failure that goes all the way to the top. Yet no
| one in leadership is held accountable? Can individuals not be
| charged for knowingly enabling this?
| p0wn wrote:
| We're not living in a democracy. We're living in an oligarchy.
| Of course those at the top won't get punished. That class never
| gets punished. Who else is gonna fund all those old decrepit
| bickerers in Washington?
| CoastalCoder wrote:
| If we're being serious, I'd say we're living in a hybrid
| system with competing sources of power: oligarchy, indirect
| democracy, direct democracy, guild system, etc.
| meheleventyone wrote:
| To be fair you can describe most governments that way, even
| the totalitarian. It's always a mix but the interesting
| question is the current distribution which is what I
| believe the OP was trying to voice.
| emodendroket wrote:
| I agree, though the relative strength of these factions
| seems different from a few decades ago.
| triactual wrote:
| So oligarchy-dominant?
| datavirtue wrote:
| I saw a documentary on Putin's rise to power that
| included (others do not) coverage of how the oligarchs in
| Russia (seven of them) basically set or determined how
| Putin would govern. They wanted a democracy friendly to
| their interests (capitalism) as the post-Yelstin era was
| beginning. It was quite revealing how Putin was subject
| to them and it reminded me a lot of America and our
| leaders and how they cowar to business leaders (and
| Trump's association with Russians). They agreed to stay
| out of politics if Putin stayed out of commerce. The
| oligarchs then divided up various industries among
| themselves.
|
| In the end, it left the impression on me that Putin is
| just a player or a puppet who owes a lot of people.
| tigerlily wrote:
| Sounds much like a plutocracy.
| jimmyearlcarter wrote:
| I think thats fair. I mean we live in a system of systems,
| and there are various forms of organization at each and
| every level. However, if we're being serious, the most
| important systems (health care, military, mass media,
| telecom,...) that effect each and every one of us are
| obviously oligarchic, formed in part by massive
| authoritarian constructs (modern corporations).
| bush-bby wrote:
| Please don't take this personally, but fuck I hate this
| painfully common assertion. We most absolutely live in a
| democracy. However sometimes it's easy to get confused as to
| what that means. Democrats (as opposed to autocrats or
| oligarchs) must behave in ways that will get them the votes
| they need to stay in power. Is there anyone in particular
| enabling this? No. If there was, they either would not get
| re-elected, or constituents have decided that this is not
| enough a transgression to vote for someone else. Maybe a case
| could be made for lack of knowledge or high ignorance amongst
| the common voter contributing to poor outcome of democratic
| processes, but to say we don't have a democracy is
| irrational. No one forces you to vote for anyone. You don't
| like someone in power? Get rid of them! You can do that
| here...but unfortunately one of the benefits of democracy, is
| you need a group to enact change and policy, not an
| autocratic individual.
| Guest42 wrote:
| By singling out Democrats, are you claiming that the Koch
| brothers and Sheldon Adelson haven't influenced the
| government in ways that are beyond the scope of what
| citizens should be capable of?
| TchoBeer wrote:
| GP didn't mean Democrats as in the party, but rather
| Democrats as in the people in charge under a democracy,
| i.e. Democrats as opposed to Oligarchs
| netizen-936824 wrote:
| They mean "democrat" as the people who practice
| democracy, not the US political party
| KiranRao0 wrote:
| While I can't be sure, I believe the commenter is
| referring to "democrats" (an actor in a democratic
| government) and not "Democrats" (actors within a
| political party in the US). Correct me if I'm wrong.
| nlittlepoole wrote:
| Their influence largely comes from their ability to buy
| media timethrough PACs. Direct contributions to
| politicians is still highly regulated. You could argue
| that they can wield influence by threatning current
| politicans to fund the campaigns of competitors but at
| the end of the day this still happens through PACs buying
| media campaigns.
|
| The influence of the Koch's or Adelson is largely hinged
| on the fact that Americans don't use critical thinking
| when consuming their media. Rather than trying to find a
| way to wiggle around the first ammendment when it comes
| to spending on speech, why not try to build an electorate
| capable of critical thinking? If you don't think that's
| possible, then what's the point of any of this?
| newbie789 wrote:
| > Is there anyone in particular enabling this? No.
|
| I'm curious as to what exactly this sentence refers to.
|
| If (for example) Jamie Dimon isn't an oligarch, why is he
| essentially immune to real consequences? His ability to
| break the law with impunity is... an emergent behavior of a
| healthy democracy?
| sumedh wrote:
| > I hate this painfully common assertion. We most
| absolutely live in a democracy.
|
| > Get rid of them! You can do that here
|
| No you cannot, the US has gerrymandering which makes it
| very difficult to get rid of politicians in local/state
| races.
| [deleted]
| xwolfi wrote:
| Chances are, the people you're thinking of, the very top, may
| very well have proof in writing they require employees not to
| talk abt the business on whatsapp.
|
| I work in the same kind of company and Im baffled, I wouldnt
| dare say the name of a client on whatsapp and sometimes the
| regulated chat system is so inconvenient I have to use some
| personal device but we usually do it to "ping" people so they
| then go to the recorded system.
|
| And that they seem to have used it for decision taking, not
| just random discussion at the bar, means every low level
| employee who ever gave a formal report or raised a formal
| question without resending by email is wrong.
| Every.low.level.employee, yes.
|
| Burn the top all you want, but at this point maybe the SEC
| should directly go to our companies fucking explain people that
| we must record all steps in decision making, not just for
| discovering fraud but to protect ourselves and our clients from
| suspicion in the first place.
|
| Shocked that it happened at JPM. The SEC is also wrong to say:
| "Indeed, supervisors, including managing directors and other
| senior supervisors - the very people responsible for
| implementing and ensuring compliance with JPMS's policies and
| procedures "!! No, EVEYONE is responsible, from the dimwit
| intern making coffee to the ferrari driving MD, record keeping
| is bank 101, this makes me boil for some reason. I d be such a
| pain in the ass of a big boss if I saw that where I work.
| Talanes wrote:
| > The SEC is also wrong to say: "Indeed, supervisors,
| including managing directors and other senior supervisors -
| the very people responsible for implementing and ensuring
| compliance with JPMS's policies and procedures "!! No,
| EVEYONE is responsible,
|
| And you were born knowing this, or did someone have to model
| the proper behavior for you first?
| marcellus23 wrote:
| > Chances are, the people you're thinking of, the very top,
| may very well have proof in writing they require employees
| not to talk abt the business on whatsapp.
|
| So because the bosses have a rule written down somewhere,
| that absolves them of the responsibility to make sure their
| employees are actually following it?
| nus07 wrote:
| What are the odds that the profits from these recordkeeping
| failures exceeded $125M? If you did this as an individual you
| would be in prison. As a corporation like JPMorgan a fine as a
| slap on the wrist.
| datavirtue wrote:
| Yeah, they'll just pay it and head to the Christmas party.
| Quick email to someone in accounting to do a wire transfer.
| teawrecks wrote:
| Everyone's complaining that they only had to pay $125m, but what
| about the part where they had to "implement robust improvements
| to its compliance policies and procedures"?! The amount of
| "recordkeeping failures" this will prevent in the future is
| priceless!
| JaimeThompson wrote:
| They should put their enhanced record keeping on the
| blockchain!
| davesque wrote:
| When the government imposes such pitiful fines, it really comes
| across more as seeming like they just want an extra cut every
| once in a while. It doesn't feel at all like they care if JP
| Morgan ends up doing things any differently.
| bshipp wrote:
| I'm glad this point has been made. $125 million is pretty much
| the bonus allotment for the janitorial staff at JC Morgan.
| lars-b2018 wrote:
| I agree. These types of fines are relatively small potatoes
| on the earnings that occurred during this time. Having worked
| for a large US bank for a large portion of my career,
| everyone is typically trained yearly in an online course that
| covers records management practices and what to do. I know
| this because I was accountable for records management
| practices at the bank. The other question is, what happened
| internally? How come internal audit didn't catch this back in
| 2018-2019 time period?
|
| At the end of the day, it's often more profitable, and in the
| shareholder's best interest to say I am sorry, vs. actually
| follow policy. At the end of the day, regardless if the
| C-level knew about it or not, they are accountable. And even
| if one of the largest banks in the US has to pay a relatively
| paltry fine like this, the CEO and the management chains that
| were participatory in this behavior should forgo bonuses.
| That will change things. Otherwise, this behavior will
| continue.
| datavirtue wrote:
| Agreed. There is never a whiff of mention about revoking a
| banking charter.
| lmg643 wrote:
| am i the only person looking at this as - where is the business
| opportunity here?
|
| silicon valley created all these amazing tools for communication,
| people want to use them, and they don't play nicely with business
| requirements
|
| almost like the only safe tool is email because it is so old they
| know how to handle it.
|
| seems like an opportunity for better solutions?
| mensetmanusman wrote:
| Wups, sorry about that, here is a week's earnings.
| [deleted]
| kyruzic wrote:
| Its not even a single day's earnings. They had a net income of
| 11.6 Billion in Q3 2021 which averages out 127 million a day
| (including weekends).
|
| https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chas...
| goopthink wrote:
| One of the recurring themes in comment sections around fines for
| banks and large businesses is that "the fine is not in proportion
| to the size of the business".
|
| I guess it makes sense to ask then, do we want to have fines that
| are proportional to the revenue/profit/"X"-value of a business
| (and how might that get gamed)? Where if a small business is sued
| for something like this, it will only pay $100 while a larger
| business for the same infraction will pay $100,000,000? And if
| we're ok with that, are we ok then also acknowledging that we
| completely disincentive any sort of legal enforcement of small
| businesses, from a cost/benefit perspective?
|
| I actually think the inverse is true: if the SEC has decided that
| the correct penalty for recordkeeping failures is $125M, it is
| likely a balance of proportionality to the crime, cost of
| enforcement, and proportion to victimhood of the crime. The
| question I always wonder around this is, how much of this $125M
| goes back towards victims (if any) and how much goes towards
| further agency enablement to pursue criminal activity? Is $125M
| enough for the SEC to open X more cases (knowing how overcapacity
| they and every other government agency are)?
| 0_____0 wrote:
| What are we calling a small business? For a 1-4 person outfit,
| $100, combined with the administrative hassle, may just be
| enough to get the business to amend some process. Even the
| moderately wealthy usually don't intentionally leave their cars
| parked where they'll get a ticket, because it's annoying to
| have to deal with it.
| [deleted]
| wand3r wrote:
| I think it comes back to Fight Club:
|
| > Narrator: A new car built by my company leaves somewhere
| traveling at 60 mph. The rear differential locks up. The car
| crashes and burns with everyone trapped inside. Now, should we
| initiate a recall? Take the number of vehicles in the field, A,
| multiply by the probable rate of failure, B, multiply by the
| average out-of-court settlement, C. A times B times C equals X.
| If X is less than the cost of a recall, we don't do one.
|
| If the cost of the fine is less than the profit that can be
| made by ignoring it, it will get ignored. Especially because
| banks seem to have privatized profits and socialized losses. So
| I don't think it should be necessarily proportional to a
| companies size but certainly a multiple of the cost of the
| externality. For example, if an oil company gets caught
| polluting, they should pay a big multiple of the damages so
| that it is ALWAYS cheaper ti invest in doing the right thing.
|
| Also, the SEC is not a particularly popular organization and I
| think they have lost a lot of trust (if they ever really had
| any)
| goopthink wrote:
| I think that's absolutely and cynically correct. For example:
| there is a concept of parking tickets with fines. The fines
| are set to discourage certain behaviors while also not being
| cruel and unusual. Some people will never park "illegally"
| while others consider parking tickets to be the unfortunate
| risk or consequence of how they live their lives and do their
| jobs. The same is true for all penalties, period.
|
| This cynical calculus should be separated from how we feel
| about the organizations that commit things that result in
| fines. It's really easy to hate on banks and believe that
| every fine is justified and should actually be way bigger.
| Pitchforks and burning down the barn, ya know? But someone
| somewhere decided that calculus of appropriateness based on a
| variety of factors, and it is the lowercase-p political
| process to push for changes based on outcomes we see. But the
| pendulum swings both ways. China is an example of a country
| where if a company goes against government rules it can be
| dissolved, its leaders arrested and thrown in prison, based
| on criteria they have calibrated politically. Or in some
| other countries, you may be beheaded for social infractions.
| Not trying to reduce this to absurd (but real) logical
| extremes, but highlighting that this is precisely the
| difficult balance folks try to find, and our sense of
| proportionality is often affected by the current popular
| conception of them as an industry or as an individual
| company/person. I.e., just as many people hate on banks and
| think they should be punished higher, they turn around
| express complete disbelief at "unfair" fines and laws that
| are broken by innovators that run faster than regulations
| allow (read: tesla, uber, airbnb, etc). Sometimes we
| collectively feel fines are justified, sometimes not,
| sometimes too high, sometimes too low. Your calibration may
| vary.
| luckylion wrote:
| > But someone somewhere decided that calculus of
| appropriateness based on a variety of factors, and it is
| the lowercase-p political process to push for changes based
| on outcomes we see.
|
| Isn't it likely that this someone now works for a large
| bank and directly profits from their previous generous
| decisions?
| dwater wrote:
| I think the layperson wants the fine to be big enough that it
| disincentivizes the bad behavior that resulted in the fine and
| behavior like it. JP Morgan recorded $12.1 Billion profit in
| 2020, so a fine of $125 Million is about 1% of their annual
| profit. I doubt Jamie Dimon is sweating too much about that.
| goopthink wrote:
| For the record here, in addition to the fines, there is an
| additional unreported price of legal costs to fight this and
| compliance costs to fulfill obligations as per settlement.
| It's not quite an iceberg costs, but I guarantee they hired
| expensive lawyers to fight this beyond usual retainers.
| notreallyserio wrote:
| I'd rather see the board and executives indicted (when it can
| be shown they are culpable) and then have the government seize
| the corporation. I mean, if we're doing civil asset forfeiture,
| let's take it all the way, eh?
|
| In my view mere dollar fines are insufficient when it comes to
| fraud.
| Karunamon wrote:
| Administrative dissolution, aka corporate death penalty. I
| get this would be satisfying, but I'd really rather not
| provide more incentive for kleptocracy.
| sumedh wrote:
| > then have the government seize the corporation.
|
| Then people lose jobs and that does not look good on TV.
| gorbachev wrote:
| The real problem is that the big banks break laws and
| regulations continuously.
|
| If you look at how many times have they been caught, the list
| is very, very long.
|
| Yet every time there are no real consequences. A fine here and
| there and settlement agreements written in a way that nobody
| gets any trouble for anything. I'm actually surprised the bank
| admitted to anything this time. Usually they just pay a fine,
| and admit to nothing.
|
| For heaven's sake, even HSBC drug cartel money laundering
| scandal results in not a single person going to prison or
| getting fired. HSBC even violated the additional rules they
| were supposed to be subjected to during a probation period
| after settling, and yet again nothing happened, except they
| paid a small(ish) fine.
|
| The entire industry is completely lawless.
| conductr wrote:
| It's true for all heavily regulated companies. The
| regulations can be difficult to interpret, exceedingly
| onerous, or overly verbose.
|
| I've worked in banking and healthcare and it's not unusual
| for the regulators to fine you for something you didn't know
| about (not even your army of attorneys or compliance
| department), or fine you because you interpreted things
| differently and now they disagree. Sometimes you change your
| internal operations and technologies, spending big $$$, only
| to find you to find out about some new case law that opposes
| your original interpretation. Then, your faces with the
| question of do we go through a massive re-
| implementation/disruption, or do we just take the risk.
|
| Usually, in my experience, the cost of fixing things
| internally far exceeds the cost of fines and so the business
| decisions often boil down to that simple ROI math.
| blacksmith_tb wrote:
| So this isn't a fine but a settlement, so I suppose you could
| argue that JPM wouldn't have agreed to pay it if they couldn't
| afford it. Otherwise, the kind of structure you're describing
| is similar to punitive damages[1], which strike me as good in
| theory, if not practice.
|
| 1: https://en.wikipedia.org/wiki/Punitive_damages#United_States
| darkwizard42 wrote:
| Why is it black and white about proportionality?
|
| Fines should have a minimum amount which should be designed to
| seriously cripple repeated bad actors and induce enough
| financial pain to force amending the fine-causing behavior.
|
| From a cost-benefit perspective... yes it makes sense to go
| after bigger companies creating larger more impactful
| violations. No one reasonably expects a small business to be
| fined $125M...
| gostsamo wrote:
| A big business can make much more damage than a small one.
| Also, even relatively small fine can shake heavily a small
| business. So, yes, I'm totally for fines that communicate to
| the doer that the done is not good.
| spaetzleesser wrote:
| Fines should be a deterrent and not just cost of business. It
| seems we have reached a point where large companies can do
| shady stuff, make lots of money, pay a fraction of that as fine
| and nothing else happens. So they will keep doing it.
| throwaway837282 wrote:
| Using throwaway account. I work at a broker-dealer. This is part
| of a huge ongoing battle with the SEC. Broker-dealers under SEC
| rules must constantly monitor all employee communications,
| flagging for keywords and reviewing a large subset. These
| communications go to WORM storage and in practice are
| periodically dumped to the SEC. If an employee talks about work
| on a personal device that isn't being actively monitored- huge
| fines like this one. You can beg your employees not to do it all
| you want, but ultimately there are only two ways for a company to
| respond to this enforcement: do all work over phone calls and not
| text, which the SEC is fine with, or start monitoring personal
| communications.
|
| I'll leave it to you all to decide which course of action you
| think JP Morgan should take.
| ChrisArchitect wrote:
| Interesting/implications because of the nightmare of BYOD and
| general user laziness/UX hurdles that many of you are all too
| familiar with I'm sure.
| Nzen wrote:
| I have a friend who works for an insurance firm. This company
| enforces HIPPA requirements of not saving any personally
| identifiable information by prohibiting any means of saving
| information. They aren't allowed their phones, nor paper, and
| the computers they use are basically kiosks without access to
| text editors. That made for difficulties in staving boredom and
| in helping people across different days (given they'd need to
| remember the context). That's an extreme example, but not
| impossible if the requirement is to be able to reproduce _all_
| communications relating to some investment instrument.
|
| I don't doubt that some high value employees probably already
| have company phones. For the others, I wonder if they will have
| to surrender their phones to not use them during the day or to
| have the chat history, forfend, exported.
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