April 16, 2011
Read an interesting article just this morning. It's about Bernie Madoff and his Ponzi scheme. As probably everyone knows Bernie was engaged in an investment fraud and many people lost their money. What probably not many people realize is that Madoff himself conducted his business through a bank. In this case JP Morgan. What the article mentions is that U.S. government officials are investigating what actions JP Morgan took in this matter, or more importantly didn't took. When you run a bank it's quite easy to see large amounts of money going on and off an account.
This is like first grade math to these guys. The issue comes up if they could have detected the fraud and if they should have reported it to the appropriate authorities. A number of employees of JP Morgan are under investigation. John Hogan, Matthew Zames and Carlos Hernandez seem to be the ones that are held accountable and all are part of the executive committee. According to the investigation these 3 men already discussed the Madoff situation in 2007 and suspected it was a Ponzi scheme. You know what these men did? Nothing! No warnings to shareholders or watchdogs. They did nothing.