Could JPMorgan Chase CEO Jamie Dimon Face Jail Time?

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Today, financial reporter David Dayen argues in Salon that JPMorgan Chase CEO Jamie Dimon has committed an offense that could carry with it a sentence of up to 20 years in prison…

The crowd waited impatiently outside 270 Park Avenue, corporate headquarters of JPMorgan Chase. Photographers readied their cameras. Then, the murmuring grew into a low roar. There was CEO Jamie Dimon, accompanied by two FBI agents. His hands were tied behind his back, held together by handcuffs. As flashbulbs popped, the agents guided Dimon into an awaiting vehicle, and drove off to take him into police custody.

Christmas miracle? It doesn’t have to be. Even putting aside the rap sheet of crimes committed by JPMorgan Chase over the past several years for which its CEO can be said to be ultimately responsible, just a week ago, Jamie Dimon explicitly violated a federal statute that carries a prison sentence. That he’s a free man today, with no fear of prosecution, doesn’t only speak to our two-tiered system of justice in America. It should color our perceptions of new rules and regulations that supposedly “get tough” on the financial industry, as we recognize that any law is only as strong as the individuals who enforce them.

The law in question that Jamie Dimon violated, by his own admission, can be found in Section 906 of the Sarbanes-Oxley Act. In the aftermath of the 2001 financial crisis, when corporations like Enron and WorldCom melted down in accounting scandals, Congress passed and George W. Bush signed Sarbanes-Oxley, meant to reform corporate accounting and protect investors through additional disclosures.

Section 906 forces corporate CEOs and CFOs (chief financial officers) to add a written certification to every periodic financial statement filed with the Securities and Exchange Commission. In this certification, the CEO and CFO must personally attest that the documents submitted to the SEC are accurate, as well as that the corporation has adequate internal controls. That phrase “internal controls” has a very specific meaning, covering the accuracy of all financial reporting, proper risk management, and compliance with all applicable regulations. Under Section 906, if the CEO or CFO knowingly or willfully make false certifications – i.e., if they know the SEC filing contains inaccurate information, or that the company’s internal controls are inadequate – they face fines of up to $5 million, and imprisonment of up to 20 years.

To find out how Jamie Dimon may have publicly admitted to filing a false certification, read Dayen’s entire story at Salon.

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  • Anonymous

    No.

  • anamericancynic

    Couldn’t happen to a nicer guy!

  • evilroyslade

    our politicians love JP Morgan and Jamie. He’s the repub poster boy. What can be wrong with that?

  • Karyn Armstrong

    I am doing the “happy dance,” this man, Jamie Dimon is a clone of Bernie Ebers and deserves to be held accountable for every single house it took from the American people. The majority of them were WAMU loans bought by JP Morgan Chase as instructed by the government because WAMU sold thousands of predatory loans!!!

  • Stewart Moore

    Until Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wis.) rode to the rescue this week, Pentagon brass and their allies had been issuing dire warnings about the nation’s military readiness: The armed services were being decimated, they said, by sequestration—the automatic budget cuts that were set to trim $1 trillion from the Pentagon budget over the next decade. “It’s one thing for the Pentagon to go on a diet. It’s another for the Pentagon to wear a straitjacket while dieting,” grumbled Rep. Jim Cooper (D-Tenn.). The message got through: The House overwhelmingly approved the Ryan-Murray plan just two days after it was introduced.

    But now, the Pentagon has once more gotten a reprieve from the budget ax: Under Murray and Ryan’s congressional budget deal, the Pentagon will get an additional $32 billion, or 4.4 percent, in 2014, leaving its base budget at a higher level than in 2005 and 2006. (The Department of Defense expects its total 2014 budget, including supplemental war funding, to be more than $600 billion.)

    Before the budget deal, some critics of defense spending had been ready to accept sequestration as the blunt, imperfect tool that might force the military to shed some of the bulk it acquired while fighting two of the longest and most expensive wars in our history. Even with the sequester in place, the Pentagon’s base budget was set to remain well above pre-9/11 levels for the next decade, and the military would have taken a far smaller haircut than it did after Vietnam and the Cold War wound down.

    The wars in Iraq and Afghanistan cost $1.5 trillion, about twice the cost of the Vietnam War when adjusted for inflation. Those funds came entirely from borrowing, contributing nearly 20 percent to the national debt accrued between 2001 and 2012. And that’s just the “supplemental” military spending passed by Congress for the wars—the regular Pentagon budget also grew nearly 45 percent between 2001 and 2010.

    No wonder, perhaps, that defense watchdogs found the Pentagon’s wailing about the sequester less than convincing. “These ‘terrible’ cuts would return us to historically high levels of spending,” snapped Winslow Wheeler of the Project on Government Oversight. According to Lawrence J. Korb, a senior fellow at the Center for American Progress, the Pentagon could reduce its budget by $100 billion a year without undermining its readiness. The sequestration cuts for 2013 amounted to $37 billion.

    Not so long ago, a hawkish GOP politician called for the “bloated” defense establishment to “be pared down” and retooled for the 21st century. The new budget deal doesn’t reissue the blank check the Pentagon received during the past decade, but it may have removed the incentive to pare down. Below, a field guide to just how big the Pentagon budget is—and why it’s so hard to trim. (That GOP politician? Former Sen. Chuck Hagel, now the secretary of defense.)