August 13, 2012

NOT PUNISHING FRAUD INVITES MORE:

Those Pesky Derivatives Strike Again (Michael Bobelian, 8/12/12, Forbes)

Derivatives stood at the center of AIG's downfall.  JPMorgan Chase is in the process of losing billions of dollars stemming from trades involving these financial products.  And they have been the target of numerous government investigations and multimillion dollar settlements involving Citigroup, Goldman Sachs, and Wachovia (which later merged with Wells Fargo) in recent years.

Now, it's Morgan Stanley's turn.  Only this time, it isn't being accused of selling dubious and enigmatic investments to naive investors.  Instead, federal regulators have claimed that the bank served as a counterparty with KeySpan (a utility) and the electricity provider's leading competitor as part of an effort to artificially prop up electricity prices in the New York metropolitan area.

Posted by at August 13, 2012 1:32 PM
  

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