They paid $13 billion in fines for their role in underwriting fraudulent securities[0][1] as it was coming to light. In a brief that was never filed as part of the settlement (JP Morgan Chase really didn't want this to be filed and made it a contingency for the settlement), made public after the settlement and summarized in the statement of fact released along side the settlement itself[2], the government had enough evidence that it was going to file a lawsuit, the core of which was related to this:
>for a fraudulent and deceptive scheme to package and sell residential mortgage-backed securities that the bank knew contained a material amount of materially defective loans.
If that's not enough, if we want to look just beyond 2008, they pulled a scam to manipulate the part of the settlement which was suppose to 4 billion in loan relief for home owners[3] by forgiving phony mortgages.
I have more, if so desired, but I didn't want this to turn into a hundred link dump of information that would be very dense to read.
As long as you have the money in your coffers to pay for any wrongdoing you'll never get charged. These fraudulent securities in 08' were also somewhat removed from depositors so it's hard to see too many similarities to this case of a local bank.
Robosigning, directing employees to sign fake names on contracts and repeatedly submitting fraudulent statements to the courts, among other things, in a largely successful effort to steal people's homes on a mass scale.
>Reuters has found that some of the biggest U.S. banks and other "loan servicers" continue to file questionable foreclosure documents with courts and county clerks. They are using tactics that late last year triggered an outcry, multiple investigations and temporary moratoriums on foreclosures.
>In recent months, servicers have filed thousands of documents that appear to have been fabricated or improperly altered, or have sworn to false facts.
Reuters also identified at least six "robo-signers," individuals who in recent months have each signed thousands of mortgage assignments -- legal documents which pinpoint ownership of a property. These same individuals have been identified -- in depositions, court testimony or court rulings -- as previously having signed vast numbers of foreclosure documents that they never read or checked.
> But then you have to ask if the institutions doing the application verifications were criminally negligent.
That wasn't negligent. It was intentional.
Not by the institution, but by the officers acting against the interests of the institution.
A tiny example out of so many: it is against the interest of a secured lender to inflate appraised value or allow them to be inflated.
Yet, starting at 2004, appraisers across the country started reporting that they were being pressured to inflate appraisals and blacklisted when they refused.
This is clear indication of fraud against the institution and regulators. There is simply no honest reason to inflate appraisals.
> Not by the institution, but by the officers acting against the interests of the institution.
The institution made a bunch of money. In the ghoulish way banks behave, the institutions interests are only making money. The officers were acting in the interest of the institution the way they understand them.
I believe a similar concept exists in finance, as part of fiduciary duty. It's called duty of care in that context.
"The American Law Institute’s Principles of Corporate Governance defines the duty of care as the duty by which a corporate director or officer is required to perform their functions in good faith; in a manner that they reasonably believe to be in the best interests of the corporation; and with the care that an ordinarily prudent person would reasonably be expected to exercise in a like position and under similar circumstances (negligence standard)."
Again, that's a civil issue not criminal. In theory some lenders might have been able to file civil lawsuits against some of their own employees to claw back part of their bonuses or whatever, but that would have been pointless.
You're right, it's civil rather than criminal, but in the case of some investment companies, like those that sold mortgage-backed securities, it can be enforced by the SEC.
That's just one example. I expect that, had they wanted to, the government could have found many applicable laws to go after those responsible for the financial crisis.
Should I understand that you think accountability for the fraudulent loan applicants was just a form of efficient markets under a broken institutional system?
They shopped around to different ratings agencies and only hired those that provided the better results.
You would need to classify everything from consumer reports to industry awards to not inviting influencers who give negative reviews to events as stealing as well.
Yeah, no. Credit agencies weren’t hapless victims of market forces.
> Another email between colleagues at Standard & Poor's written before the bubble burst, suggests awareness of what would happen to the securities they were giving top ratings to: "Rating agencies continue to create and [sic] even bigger monster--the CDO market. Let's hope we are all wealthy and retired by the time this house of cards falters."
They were willing participants precisely because they were making huge fees to look the other way.
> One study of "6,500 structured debt ratings" produced by Standard & Poor's, Moody's and Fitch, found ratings by agencies "biased in favour of issuer clients that provide the agencies with more rating business. This result points to a powerful conflict of interest, which goes beyond the occasional disagreement among employees."
These kinds of things are deals negotiated at the highest level of the companies involved. Credit agencies were paid to give the crime the banks were doing a veneer of respectability.
> These kinds of things are deals negotiated at the highest level of the companies involved
To me it just seems a more or less natural outcome of the major structural flaws in the whole business model. I’m not sure you need an explicit conspiracy for credit agencies to begin behaving in such a way that maximizes their revenue, it was mostly just a natural outcome of competition and extremely useless and inefficient regulation. If anyone deserves to go to prison it’s the people who were supposed to be regulating the banking industry.
Obviously the Federal government had zero interest in doing that but if they only went after the bankers it would have quickly become obvious that they are not the only ones to blame.
“You don’t need an explicit conspiracy for pig butchering. It’s a natural outcome of competition in the black market and extremely poor security and training.”
If you can actually draw a distinction between what scammers do and what companies do other than “we explicitly have laws on the books to treat it as a crime” I’d love to hear it. There’s a lot of similarities between corporations and criminal organizational - it’s just groups of people who are trying to make money.
And as for who deserves to go to prison, the ratings agencies refused to pay market rates to retain talent being poached by the banks. The same happens in government. So basically the banks continually poach the best people and create incentives to keep the status quo and for regulators to turn a blind eye so that they can land at the bank later. You can go after the regulators but I don’t think that’s going to be an effective strategy to solve the problem.
> You don’t need an explicit conspiracy for pig butchering
Yeah but IMO the scam part is mostly tangential. It hardly matters what did the CEO do with the stolen money, he could have gambled it away at a casino or bought a yacht with it, at the end of the day he still stole it and that’s the crime we’re discussing here.
> You can go after the regulators but I don’t think that’s going to be an effective strategy to solve the problem.
Yes, but going after the bankers would have exposed the extreme incompetence by the regulators and if you started unwinding the whole thing it would have affected a lot of high level people in government. So it’s rather obvious that that they had very little desire to prosecute anyone.
And it hardly matters who deserves what since you can’t send anyone who was just exploiting loopholes and didn’t clearly brake any laws regardless how immoral or unethical their actions were.
Not outright bribes. Just the implicit knowledge among all parties that the rating agency that gives bad grades get fewer customers. Result is the same but not exactly "bribing".
Yea, probably there was invidual cases of bribing like in all industries. But overall the issue wasn't oughtright bribes.
It wasn’t just implicit. There was explicit acknowledgment of the problem and turning a blind eye precisely because they were getting paid by the banks. I don’t know how else to categorize that except as bribery - you’re literally paying money to influence the outcome which is the very definition of bribery.
IIRC, SCOTUS recently ruled that only an explicit quid pro quo is considered a bribe. So laundering monies thru multiple parties is a-okay and mutual backscratching, such as a gifting someone an RV and then coincidentally getting preferential lucrative judgements, is reciprocal altruism. Or something. Because vibes.
I know, I know. Requiring conspirators to say "this is a bribe" for there to be legal jeopardy is sort of nuts.
No problem at all with the concept of price discrimination. The economics make sense. In any scenario where unit costs are low, but development costs are high, the ideal situation is where everyone gets the benefit of having the product at a price they are willing to pay. Maximizes total value to all parties.
The problem with the SSO tax is that it wedges itself into the pre-existing cracks in most organizations. Security practitioners are already in conflict with other departments. What happens when a department head has pitched a new SaaS as being 1x price, but then it becomes 2x price after the security team's requirements are added? It is not seen as the [application is expensive], it seen as [security team's requirements have doubled the price]. Conversely a price discrimination strategy which locks specific user facing features behind a specific tiers means that the same person championing the software, would also advocate for the appropriate payment tier.
Price discrimination is a valid strategy. Responding to organizations who are actively making the security practitioners job more difficult is also valid.
>If you look at a state like Colorado, the energy usage is vastly different than Florida or Texas with lots of heat and humidity.
Electricity usage yes. Energy usage no. Household energy usage is lower in the warmer states, and higher in colder states. I would expect that CO household energy consumption would be higher than FL or TX.
Yes whoops. I should have made that distinction. The parent comment was talking about electricity, and that’s what I meant.
I would argue that the USA as a whole generally has more climate variability than the UK in addition to larger housing to account for the overall energy usage as well.
The connection not drawn here is about capability and flexibility.
You can make a drill without the clutch/torque adjustment, and it will be simpler to use but less capable. Or using the car example, knowing how to manually select gears gives a greater level of control over the vehicle, but most modern drivers don't know/care enough to learn.
The trend is moving decisions/control away from the user. Precisely because it's easier to allow Apple or Google to make all the decisions, rather than learn, manage and maintain things. Users don't understand a CLI any more than they understand a manual transmission. If we want these things to exist, education must be in the mix.
100% That is exactly how it is playing out. People do not register (2passkeys * 20 services). They sign in with Google or Microsoft and call it a day. Privacy implications ignored.
Even more true in Corp IT. People will learn to use passkeys with SSO at the office and take those habits home.
The meme that big corps can’t move fast and that startups are nimble is a stereotype I’ve come to realize not true at all. I’ve experienced this myself, more than once.
What can feel like you’re moving fast is sometimes just churn but it doesn’t necessarily equate to progress.
Culture at OpenAI is probably more consensus driven, which can handcuff any big moves.
If you are involved parents, it is difficult to make a wrong choice.
There is nothing wrong with homeschooling and it works best when you have a network of people who are doing the same to add-in social opportunities. The only thing that I would be a little concerned about in your specific situation is the timelines. Transitions are the hard part. Setting up the homeschooling methods/practices/habits, and then switching back to traditional school methods/practices/habits. Homeschooling for just 1-2 years eats up a lot of time in transition.
If you have a decent public school option. Consider participating in it. Get involved, volunteer, give feedback in the school board meetings. Take however much time you planned to spend on homeschooling and invest it there. Both your child and others will benefit significantly. However, don't sacrifice yourself or your kids to try and save a bad situation. It also means that socially there will be some pre-existing friends for that first year of high school.
> stop splitting the job of dev and ops into separate roles
Specialization is the key to managing complex projects effectively. Effective teams will increase specialization where possible, and improve the feedback mechanisms between specialists.
Take a look at other complex industries like aircraft. We do not have simple "Airplane Professionals" who design/build/maintain/fly planes. But rather each of those categories are divided into subcategories with specialists.
While I agree that specialization is good, I also think it's really good to care and know some minimum about the adjecant teams.
I'm not a super ops guy nor do I do support (unless it's really bad), but I care about those teams and I try to learn the basics so I have an idea how my the code I write will affect them.
Mechanisms like this exist, but they probably aren't integrated into whatever system you are using, and delays which involve an approval workflow add a lot of overhead.
In most cases the engineering time is better spent pursuing phishing resistant MFA like FIDO2. Admin/Operations time is better spent ensuring that RBAC is as tight as possible along with separate admin vs user accounts.
The most egregious stuff in 2008 was mispricing MBSs. Incorrectly pricing risk is pretty far from stealing money from investors/depositors.