Wall Street Bank With Three Felonies Sends Employee To Head SEC Trading Division

Authored by Pam Martens and Russ Martens via WallStreetOnParade.com,

The arrogance of the captured Wall Street regulators in Washington grows exponentially with each passing day.

 

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The only Wall Street bank which has admitted to three criminal felony charges – all coming within the past three years – has been allowed to send one of its trading executives to head a key post at Wall Street’s top cop – the Securities and Exchange Commission (SEC). Failing up continues to be the business model in the nation’s capitol.

The Trump administration, in its continuing Swamp-filling mandate from the billionaires behind the dark curtain, has elevated Brett Redfearn as Director of the Division of Trading and Markets at the SEC. Redfearn has worked at JPMorgan Securities from November 2004 to October 2017 when he was named to the new SEC post.

In 2014 the U.S. Justice Department slapped JPMorgan with two criminal felony counts related to its banking relationship with Ponzi schemer Bernie Madoff. JPMorgan admitted to the charges and received a deferred prosecution agreement.

On January 7, 2014, FBI Assistant Director-in-Charge George Venizelos had this to say about the criminal charges:J.P. Morgan failed to carry out its legal obligations while Bernard Madoff built his massive house of cards. Today, J.P. Morgan finds itself criminally charged as a consequence. But it took until after the arrest of Madoff, one of the worst crooks this office has ever seen, for J.P. Morgan to alert authorities to what the world already knew. In order to avoid these types of disasters in the future – we all need to be invested in making our markets safer and more equitable. The FBI can’t do it alone. Traders, compliance officers, analysts, bankers, and executives are the gatekeepers of the financial industry. We need their help protecting our markets.”

When the Madoff criminal charges went down, Redfearn held the position of Head of Market Structure Strategy for the Americas at JPMorgan. He was in that position for five years and nine months according to his LinkedIn profile, meaning that he could have or should have heard the rumors all over The Street that Madoff was running a Ponzi scheme while his own bank was handling the primary business account for Madoff for decades without seeing any of the tens of billions of dollars leaving the account going to pay for the options trades that Madoff was supposed to be doing for his clients. According to prosecutors, Madoff never actually made any trades for his clients but simply issued fake client statements showing the trades. (See our full report: JPMorgan and Madoff Were Facilitating Nesting Dolls-Style Frauds Within Frauds.)

One year after the Madoff-related felony counts were filed against JPMorgan, it admitted to yet another criminal felony count filed by the U.S. Justice Department for its involvement in the rigging of foreign currency trading. In addition to the Justice Department’s charges, the U.K.’s Financial Conduct Authority (FCA) detailed a wide scale breakdown of management failures and risk controls and stated that JPMorgan’s front office was actually “involved in the misconduct.” The FCA wrote:

“Pursuant to its three lines of defence model, JPMorgan’s front office had primary responsibility for identifying, assessing and managing the risks associated with its G10 spot FX [foreign exchange] trading business. The front office failed adequately to discharge these responsibilities with regard to the risks described in this Notice. The right values and culture were not sufficiently embedded in JPMorgan’s G10 spot FX trading business, which resulted in it acting in JPMorgan’s own interests as described in this Notice, without proper regard for the interests of its clients, other market participants or the wider UK financial system. The lack of proper controls by JPMorgan over the activities of its G10 spot FX traders meant that misconduct went undetected for a number of years. Certain of those responsible for managing front office matters were aware of and/or at times involved in the misconduct.”

Another trading fiasco that raises serious questions about the SEC’s selection of a trading executive from JPMorgan to serve in a Federal watchdog capacity is the 2012 “London Whale” scandal. JPMorgan was using hundreds of billions of dollars of deposits from its insured depository bank, Chase, to allow traders in its London office to trade in exotic, high risk derivatives. As a result of the crazy bets, JPMorgan Chase lost at least $6.2 billion, paid over $1 billion in fines, and was pummeled in a 306-page report from the U.S. Senate’s Permanent Subcommittee on Investigations. Senator Carl Levin, Chair of the Subcommittee at the time, said JPMorgan “piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight, and misinformed the public.”

Americans will not likely draw comfort that a long-term executive from a Wall Street bank with this kind of history is policing trading on Wall Street.

Comments

philipat MrBoompi Jan 11, 2018 9:22 PM Permalink

So does that mean Scotia or HSBC will get to appoint the next Head of CFTC?

The arrogance has got to the point where they clearly don't give a shit what anyone thinks; just as the manipulation of "markets" is no longer attempted to be hidden and has become in-your-face. In part because of "Regulators" like this one.

In reply to by MrBoompi

Branded Jan 11, 2018 7:38 PM Permalink

Shit, SEC be thinkin' 'Why the FBI have all the fun putting criminals in to run the place?'.

Hire Al Queda to run DHS while we're at it, no different than the scum and perverts there now - hacking state voting systems & feeling-up kids.

. . . draining and refilling the swamp all at the same time.

wisehiney Jan 11, 2018 7:43 PM Permalink

Gonna move wall street to the bayou.......

How Trump’s Tax Cut Will Lead To NYC’s Fall

Daniel Moss and Scott Lanman

January 11, 2018, 4:01 AM EST

The American South will keep rising and Dallas will eclipse New York. The city that never sleeps has had its obituary written plenty of times, but it may just have met its match in native son Donald Trump. This week on the Benchmark podcast, Bloomberg View's Daniel Moss and Bloomberg News' Scott Lanman discuss how Trump’s tax-cut law is more than just a deficit-busting giveaway to the rich; it affirms the economic and political rise of the South. Even New York's famed cultural and intellectual scene is in jeopardy along with financial primacy. Jared Dillian Bloomberg View contributor explains how to Dan and Scott.

VIS MAIOR Jan 11, 2018 8:06 PM Permalink

white trash who fuck only betwen us..( as we now it make degeneration and retard trumptards)  who say " o my gosh"  trumptards from fucksas texas 

gosh gosh  retardex tex mex 

Son of Captain Nemo Jan 11, 2018 8:39 PM Permalink

A fitting tribute to END of the American $$$ and all those in Washington that would send convicted felons to those jobs within that agency!

Just like the U.S. MIC's revolving door post-9/11 with no strings attached between .gov coming or going.... The last "NAILS" IN AMERICANS FINANCIAL COFFIN

"Mission Accomplished"!