http://pogoblog.typepad.com/pogo/2011/06/jpmorgan-represented-by-former-senior-sec-officials-in-sec-settlement.htmlThe Securities and Exchange Commission (SEC) was in the hot seat once again last week for its $154 million settlement with JPMorgan.
The SEC had charged JPMorgan with structuring and marketing a complex mortgage securities deal just as the housing market was starting to plummet, without informing investors that the hedge fund Magnetar had essentially created the deal and bet against it. Shortly after the settlement was announced, critics started to raise questions about the terms of the settlement, including the lack of charges for individuals at JPMorgan.
Jean Eaglesham at The Wall Street Journal wrote that it was “another instance of the SEC deciding it doesn’t have the evidence to bring cases against individuals at financial firms blamed for triggering or worsening the financial crisis.” Jonathan Weil at Bloomberg observed that “JPMorgan, without admitting or denying the SEC’s claims, gets to say it wasn’t accused of any intentional violations of the law, or even any reckless ones. And aside from the SEC’s unproven allegations, the public has little idea what really went on.”
And Ryan Chittum at the Columbia Journalism Review pointed out that Robert Khuzami, Director of the SEC’s Enforcement Division, had previously worked as a general counsel at Deutsche Bank at a time when the firm was flooding the market and misleading investors about the same kind of risky mortgage deals that got JPMorgan in trouble.
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