JP Morgan Holding Back Madoff Documents

Are we supposed to believe that only Bernie and a few other miscreants within his web perpetrated this scam unbeknownst to others on Wall Street and within the halls of our financial regulators? That premise would take the definition of naivete to an exceptionally elevated level.

What other entities benefited from feeding off Bernie Madoff? Well, if we needed to rely on the likes of JP Morgan, we will seemingly never learn that info and likely more. Why is that? Bloomberg reports this morning that JP Morgan is refusing to turn over documents relating to its interaction with Madoff as requested by the US Treasury. Bloomberg writes,

JPMorgan “had financial reports in its possession that clearly evidenced fraud,” David J. Sheehan, lead counsel for Picard and a partner at Baker & Hostetler LLP, said in a February 2011 statement. JPMorgan was the Madoff firm's “primary banker for more than two decades,” Sheehan said.

Perhaps instead of “requesting” the documents, the Treasury should be “mandating” that JPM turn over the documents. Additionally, hearing that JPM is working with regulators on this front inspires little to no confidence. Why so? All too often the cover of “regulators signed off” or “regulators were made aware” has been Wall Street's “get out of jail free” card.

People here in America and increasingly around the world are learning that the cronyism between the big banks, the pols, and the regulators comes with a very steep price for the general public and those who care about free and fair markets.

Thanks to a regular reader for sharing a story recently published in Australia that addresses this fact. From the Sydney Morning Herald, we read of The Four Business Gangs That Run The US,

Sachs says four key sectors of US business exemplify this feedback loop and the takeover of political power in America by the ”corporatocracy”.

First is the well-known military-industrial complex. ”As [President] Eisenhower famously warned in his farewell address in January 1961, the linkage of the military and private industry created a political power so pervasive that America has been condemned to militarization, useless wars and fiscal waste on a scale of many tens of trillions of dollars since then,” he says.

Second is the Wall Street-Washington complex, which has steered the financial system towards control by a few politically powerful Wall Street firms, notably Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley and a handful of other financial firms.

Third is the Big Oil-transport-military complex, which has put the US on the trajectory of heavy oil-imports dependence and a deepening military trap in the Middle East, he says.

Fourth is the healthcare industry, America's largest industry, absorbing no less than 17 per cent of US gross domestic product. ”The key to understanding this sector is to note that the government partners with industry to reimburse costs with little systematic oversight and control,” Sachs says.

Fortunately, things aren't nearly so bad in Australia. But it will require vigilance to stop them sliding further in that direction.

Will America ever be able to regain a spirit of real capitalism or are we resigned to sliding further into the crony abyss? This registered Independent fiscally conservative blogger is sickened by the cronyism and welcomes calling out the pigs in hopes that our children and children's children might have a better future.

Man up Jamie or squeal as we get the slaughterhouse ready!!

Navigate accordingly.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.