At a Senate Banking Committee hearing this week, Sen. Elizabeth Warren (D-MA) slammed JPMorgan Chase and government regulators for the huge payout the bank made to CEO Jamie Diamond. She pointed out that Dimon got a
"In 2013 alone, JP Morgan spent nearly $13 billion to settle claims with the federal government. Claims relating to its sale of fraudulent mortgage-backed securities, its illegal foreclosure practices like robo-signing, its manipulation of energy markets in California and the midwest, and its handling of the disastrous London Whale Trade," Warren said. "You might think that presiding over activities that led to payouts for illegal conduct would hurt your case for a fat pay bump." [...]The regulators weren't able to provide an adequate answer. Daniel Turollo, a member of the board of governors for the Federal Reserve, basically admitted that the Fed is more interested in financial companies' fiscal fitness than how they conduct their business or whether their CEOs are rewarded for malfeasance. Clearly, this Fed board member doesn't think the Fed should be in charge of creating deterrents and enforcing them. Clearly, Sen. Warren feels otherwise.
"I think this raises questions over whether our enforcement strategy is working or whether it's actually so bad that we're making it more likely for big banks to break the law," Warren said, adding that it is now a common belief in the banking industry to make money by any means necessary because the government fines will never reach the level of profits potentially made through questionable and illegal practices.
"Does anyone on this panel seriously think the government's current enforcement system for financial crimes is actually working in the sense of deterring future lawbreaking?" Warren asked the regulators.