Talk:2012 JPMorgan Chase trading loss

From Wikipedia, the free encyclopedia
Jump to: navigation, search
WikiProject Business (Rated C-class, Low-importance)
WikiProject icon This article is within the scope of WikiProject Business, a collaborative effort to improve the coverage of business articles on Wikipedia. If you would like to participate, please visit the project page, where you can join the discussion and see a list of open tasks.
C-Class article C  This article has been rated as C-Class on the project's quality scale.
 Low  This article has been rated as Low-importance on the project's importance scale.
 
WikiProject Finance (Rated C-class, Low-importance)
WikiProject icon This article is within the scope of WikiProject Finance, a collaborative effort to improve the coverage of articles related to Finance on Wikipedia. If you would like to participate, please visit the project page, where you can join the discussion and see a list of open tasks.
C-Class article C  This article has been rated as C-Class on the project's quality scale.
 Low  This article has been rated as Low-importance on the project's importance scale.
 

Coments[edit]

Comment on any of the following or start a new section if not already covered.

Thanks![edit]

http://en.wikipedia.org/wiki/User_talk:Rjlabs#A_barnstar_for_you.21

Original Barnstar Hires.png The Original Barnstar

Thanks! Rick (talk) 22:33, 1 June 2012 (UTC)

Article Title - DONE/CLOSED[edit]

Besides the capitalization issues and assuming this article is not deleted, I believe the title can be simplified to "JPMorgan Chase 2012 trading loss". The dollar amount is evolving and the month is not necessary unless another loss comes along this year. Thoughts? Thanks, 72Dino (talk) 15:45, 17 May 2012 (UTC)

I agree for the reasons you state. User:Fred Bauder Talk 12:56, 27 May 2012 (UTC)

Syntax has never been my personal strong suit so I'd welcome all the help with capitalization or any other syntax issues. I understand that "shorter is better" most of the time on headlines, however that is not necessarily true all the time. Perhaps:

JPMorgan's 2012 Multibillion-dollar Trading Loss

The Chase part is really irrelevant.

The multibillion-dollar quantifier I'd argue has considerable value.

There is the possibility of more than one loss here - i.e. the 'Cockroach Theory' A market theory that suggests that when a company reveals bad news to the public, there may be many more related negative events that have yet to be revealed. The term comes from the common belief that seeing one cockroach is usually evidence that there are many more that remain hidden. [From Investopedia]

Rick (talk) 04:02, 18 May 2012 (UTC)

Unfortunately no one else has commented here in the past week. Maybe we can go with "2012 JPMorgan trading loss". I think multibillion-dollar adds to much detail to the title and you've indicated "Chase" is unnecessary. If there is another notable trading loss by them in 2012 we can add the month later. I think this version best meets Wikipedia:Article titles. What do you think? Thanks, 72Dino (talk) 15:44, 24 May 2012 (UTC)
I would keep Chase, but not for any rational reason; I have no objection to the revised suggestion. User:Fred Bauder Talk 12:56, 27 May 2012 (UTC)
I am going to change to "2012 JPMorgan Chase trading loss" to better meet WP:Article titles. 72Dino (talk) 01:55, 29 May 2012 (UTC)

Need Swaps, VaR, Quantitative Trading Expertise[edit]

It is very difficult for someone who is not a regular derivative trader to get the facts straight. It is very easy to introduce errors which reverse buy, sell, short, long into when writing information based on newspaper reports which are vulnerable to the same sort of error. User:Fred Bauder Talk 13:00, 27 May 2012 (UTC)

Agree general newspaper accounts are weak in reporting nuances of derivative trades. The professional trade magazines are better. The very most refined work comes from congressional inquiry (albeit political) and the investigations of the major federal agencies. I have some background in swaps and emerging regulation in that specific area. I'm also fairly well versed in hedge accounting. I am neutral on JPM at this point curious to see what exactly emerges in the detailed investigations. Rick (talk) 17:36, 29 May 2012 (UTC)

Bullet points vs. prose[edit]

An elaborate framework has been created for this article which has not been filled in. I am minded to delete much of it unless the cavalry arrives. User:Fred Bauder Talk 13:00, 27 May 2012 (UTC)

Fred, would ask that you not be hasty in in deletion of major portions of this article as many are using it as a fact base here in a very complex, very dynamic situation. This thing is going to go through several days of Congressional hearings not to mention major investigations by FIVE or more federal agencies. Just keeping up with it is a daunting task. Would ask that you hold off major editing until after the dust settles. This is an emerging outline which is FACT based and verifiable. Many eyes on the emerging outline (that is dynamic as we speak) will make for the very best final quality WikiPedia article. Rick (talk) 17:29, 29 May 2012 (UTC)

Looks like sound expert help is being sought and some progress is being made. User:Fred Bauder Talk 18:20, 12 June 2012 (UTC)
Uh, we can just write this into prose, can't we? TheSoundAndTheFury (talk) 19:21, 6 August 2012 (UTC)
Much of it seems to be synthesis, since there are hundreds of bullet points about other topics without any context given for how they relate to the trading loss. I removed the worst bit, but much remains. Later I will try to render some parts into prose, but it's not easy to be motivated to spend lots of time writing an essay to somebody else's specification. bobrayner (talk) 11:42, 16 August 2013 (UTC)
It is frustrating that this attempt at cleanup was swiftly reverted.
Rjlabs, can you explain why it is necessary to put an excuse about rapidly-developing news at the top of the article, whilst reinserting unreadable and seemingly irrelevant pages of cruft which had blighted the article for over a year? bobrayner (talk) 12:03, 18 August 2013 (UTC)

Current events are just that - after some rather lengthy delay, two people have been criminally charged by the US DoJ, and those two have been civilly charged by the SEC. What is yet to come is actual arrest and possible extradition, international cooperation (or not), trials, finding of facts, sentencing, etc. Many critical areas of fraud law will be tested by these cases. The cases will likely set legal precedent for some time to come. Additional laws, rules, etc. may be expected based on the results.

We have yet to see a formal British and/or EU regulatory response however its likely their own investigations are proceeding.

As for the areas that were deleted and reinserted, they cover many areas of U.S. securities laws, rules and regulations that were actually (or potentially) violated. The content is all well referenced. Most points were mentioned during U.S. congressional inquiry (the numerous House and Senate investigations). Points were also raised by reputable news sources (WSJ, NYT, WP, FT, Reuters, Bloomberg, etc.)

The SEC investigation(s) are, as best I understand, very much still pending - there have only been the two individuals charged, the firm itself has yet to be. That investigation is highly likely to be cover many of the areas that are discussed.

The CFTC and FDIC also have been reported to have investigations open and pending. Therefore the investigations phase of the loss is still very much open. The Fed and OCC likewise have outstanding cease and desist orders that are pending and require JPM to take substantive corrective action or face large financial fines and further, stronger legal action. The SEC C&D order is not even out yet and it is reportedly going to require JPM to admit guilt (vs. "without admitting or denying"), and that is going to be (if implemented) somewhat of a radical legal change from the past.

We could really use UK, GB, EU regulatory response coverage if you are interested. Much of the fraud occurred in London, under the regulation of those regulators. Integrity reputations of regulators are very much at stake.

I'm traveling with very limited access to Internet for a few weeks. Sometime after that, after I've caught up with my own office work, I'll be happy to go through and update the areas you feel are not well enough tied to the article subject and show more simply and directly the exact connections. I can assure you the material was not just "copy/paste" from rules and regs. It took considerable time to create it and its all factual and quite well referenced.

In the larger context the question is, was JPM operating with sufficient risk management personnel, internal controls, internal and external auditing, etc. to be considered "well run" and operating at a risk level commensurate with the privilege of obtaining depositors insurance (backed up by U.S. citizens), and not be operating at a level where it poses potential systemic risk. As such, the case goes far beyond JPM by itself in isolation.

Rick (talk) 22:15, 18 August 2013 (UTC)

Update needed[edit]

I won't edit it myself as it seems to be under construction, but this article should be updated to reflect the recent announcement that the loss was much larger than previously stated: $4.4bn, rather than $2bn. [1] Robofish (talk) 14:19, 13 July 2012 (UTC)

even more, "4.4 billion on the botched trade in the second quarter. So far this year, the bank says it has lost $5.8" User:Fred Bauder Talk 18:18, 13 July 2012 (UTC)
The SEC proceeding should wind up this fall, see Dealbook. User:Fred Bauder Talk 22:15, 8 August 2013 (UTC)
More from Dealbook User:Fred Bauder Talk 01:14, 10 August 2013 (UTC)
And more User:Fred Bauder Talk 16:32, 12 August 2013 (UTC)
Two criminal complaints User:Fred Bauder Talk 20:06, 14 August 2013 (UTC)
Oversight analysis User:Fred Bauder Talk 13:05, 16 August 2013 (UTC)

────────────────────────────────────────────────────────────────────────────────────────────────────Unreliable Guesswork in Valuing Murky Trades User:Fred Bauder Talk 21:15, 16 August 2013 (UTC)

Irene[edit]

The fifth point, under "Irene Tse", seems to have been moved down from the paragraph above about Miss Duersten. — Preceding unsigned comment added by 86.143.239.144 (talk) 14:54, 14 September 2013 (UTC)

Some problems[edit]

The article still seems to be dominated by vast swathes of unreadable listcruft, much of which seems to be copy & pasted. Unfortunately, when I try removing it, that gets swiftly reverted with the explanation "see talk". However there is nothing on this talkpage to justify it. Can somebody explain? bobrayner (talk) 22:24, 18 September 2013 (UTC)

Large deletions on 9-18-2013[edit]

Reverted extremely very large and totally arbitrary deletions. As of today several investigations are late stage and major news (SEC in particular) is due as early as this week! This will be the very first time the SEC has officially "reacted", taken their official stand, and stated their positions. Prior to that there has been very important but diverse expert opinion and a great deal of private negotiation.

It's well understood the article needs to be eventually written into prose, and at present its "just" a very well referenced and organized outline. Would welcome expert content writers and editors to work on specific sections, especially after the investigations are closed (and the content in those areas is therefore reasonably stable). There have been some great editors working on this so far - about 57 at last count. Nearly all have made outstanding contributions.

For example, the OCC and Fed investigations are pretty much over (except there is some rumor that FINES will be levied, as early as this week.) Those sections, when stable could be finalized into prose describing what was found, what laws, rules and regulations were violated, and what the company did about it, or what the fines or consequences were.

As the regulatory agencies each wrap up they work, that section could be finalized and extraneous material could be intelligently removed. Additional information will likely be needed where there are gaps. There is a huge need to cross reference to other wikipedia pages.

To date the page stats on this article are extremely positive, bringing into question the "low" importance rating. Having the content here is obviously helpful to many, many active users, many of whom are extremely technical. Those users (comprising the majority of the readers of this particular article) are not interested in fluff and oversimplified generalities.

The questions raised with this case, and addressed legally in considerable detail by many diverse regulators, generate a great deal of information. What's at stake is how the U.S. and others regulate (or fail to regulate) large, systemically important banks. The failure of which caused the 2008- recession and a great deal of pain worldwide. Money, politics, influence, rules, fraud, manipulation of markets, law, accounting, billion dollar fines, man years consumed in the regulatory response, punishment and deterrence are all part of the program.

Editors who love to edit by all means take it section by section and intelligently avoid removing high value information content. Readers who are interested in this one, two and five years out will be few... and they will crave rich content, much as the considerable user base now craves "full unbiased current coverage" and "full background". Its the first place they go when assessing news released in the broad, (but not necessarily deep or complete) general financial media. Rick (talk) 22:40, 18 September 2013 (UTC)

Perhaps there has been some misunderstanding. Removing unreadable content is not "totally arbitrary", it is "good practice". If there are immense volumes of unreadable listcruft and synthesis and copypasta, it is good practice to remove immense volumes of it. I did take it section by section - two edits, two sections. But you just reverted all the crap back into the article. Why? bobrayner (talk) 22:48, 18 September 2013 (UTC)
Above explains it well. Just for starters, you attempted to eliminate the entire investigations section. It may seem like "crap" to you but its of vital interest to this audience. Its 100% relevant to securities and banking regulation. You attempted to eliminate vast amounts of accurate, well researched, and well reported information.
Yes, the "presentation" layer needs to be refined. Yes, it needs to be edited into smoothly flowing conventionally structured prose. And that editing I'm confident will eventually happen. There are many editors out there that have the capacity to perform a high quality editing task. As long as solid content is there to work from, they can easily work their magic. Having some experience and background in securities law and bank regulation would be of great value to the final editors in producing a high quality end product.
Further, many of the investigations are ongoing. The investigations section is going to expand with "hard information" until such time as those major investigations are fully over. At that point, with benefit of hindsight, looking at the whole picture, the material can be intelligently edited down and streamlined (being careful not to interject original research or personal bias) into smooth flowing final writing.
Everything presented there right now is unbiased, factual, secondary research based, or reported by only the most major, reputable media. The current presentation, while not ideal in the long term has immense utility to a wide audience in the immediate term.
Wholesale elimination of relevant, factual, fully referenced content on a Wikipedia article is tantamount to vandalism. Repeated destruction of Wikipedia content will eventually result in official admonishment and banning.
I'm willing to submit this entire discussion to Wikipedia conflict resolution or arbitration should you continue to feel strongly about wholesale deletion of large amounts of prior content vs. retaining the content but editing and improving its presentation. I'd ask that you respect the amount of time an official procedure will take away from fact gathering, outlining and editing content, and that you recognize the article has been extremely popular, just as it stands now. Its had 53 distinct editors ahead of you, and has viewership that spikes up sharply when news about the investigations are released. That viewership spikes have been on days where the news directly relates to the sections you have attempted to totally eliminate, and that news on the ongoing investigations continues to roll in, as we speak, with major additional announcements and reports continuing to be rapidly released. However, if you want to get an official ruling on the propriety of your wholesale eliminations, I'm happy to go through that process and live happily with any outcome that is officially determined. Rick (talk) 01:28, 19 September 2013 (UTC)
If you're happy to accept inputs from other editors, that's Good. Threatening me with banning for removing awful unreadable content is Bad. You might also want to read WP:NOTVAND.
Also, I've indented your comments. hope you don't mind. If you have to write such long comments, indenting them properly will make life a bit easier for others.
The article has had the same problem since May 2012, and it's been getting worse. If you have not yet had free time to make your content presentable, when do you think you might? bobrayner (talk) 09:25, 19 September 2013 (UTC)
I started a thread on Wikipedia talk:WikiProject Finance. Could you join in there? bobrayner (talk) 09:34, 19 September 2013 (UTC)
  • Then this should be built in userspace. As it stands now it is useless as a summary of the incident. I support Bobrayners deletions. AIRcorn (talk) 10:47, 20 September 2013 (UTC)
  • Moving to userspace sounds like a good idea. If/when it's rewritten as an encyclopædia article, it could be brought back into article-space. bobrayner (talk) 17:51, 20 September 2013 (UTC)
  • Okay had ago at trimming the worst. This is the version before I started. I suggest it is copyied to Ricks userspace or something like 2012 JPMorgan Chase trading loss/draft where it can be worked on at their leisure without creating a mess in the encyclopedia. sections can be moved back in whenever they become encyclopaedic. AIRcorn (talk) 00:29, 21 September 2013 (UTC)
Nice work. bobrayner (talk) 00:39, 21 September 2013 (UTC)

A broader problem[edit]

I found that Legal Entity Identification for Financial Contracts and Office of Financial Research were directly copied from elsewhere - half of the latter was lifted straight from job descriptions posted on the internet. Rick, this is really bad. If you can't write something in your own words, please don't write it at all. Do we need to check other articles? It looks like ICE Clear Credit has a similar problem too. bobrayner (talk) 01:03, 21 September 2013 (UTC)

Asia Securities Industry and Financial Markets Association and Association for Financial Markets in Europe have been CSD'd too. Do we need to open a case at Wikipedia:Contributor copyright investigations? bobrayner (talk) 01:22, 22 September 2013 (UTC)

Sections of Article that are stable and can now be edited into formal encyclopedia format[edit]

Background[edit]

This section is stable and can be updated for events to date. Its likely to be stable with the exception of the CFTC consideration of 'market manipulation, or if any more senior managers are charged by FBI/Justice Department for criminal violation of Federal Laws.

Trades[edit]

This section could use a heavy edit by someone knowledgeable enough to explain in detail the risks taken and how those risks performed in the market. How the 6b loss actually occurred, products used, 100b single sided bet. Perhaps some expertise on how 100b single sided bet in IC9 might manipulate the market. Much is published and the Senate Special Investigations data is a treasure trove. What was the strategy, how was it put on, what happened, how was it removed. Where did the strategy go wrong? All apart from the lack of internal controls in reporting

Top-level risk management[edit]

This area remains too dynamic for a final edit right now. Major SEC C&D order and Consent just came out 9-19-2013. Good information is available about early theories of SEC / FED / DFA violations that emerged in early House and Senate investigations vs. what was actually charged in the final C&D Order. (What was pursued legally, what got dropped? Why?) Also very new here is JUSTICE department criminal charges and breaking Federal law (particularly outside of SEC/CFTC law)

Auditors[edit]

How the outside auditors escaped unscathed when there was a wholesale internal controls weakness and complete Sarbanes Oxley violations remains an open item

Outside counsel[edit]

Most of the legal and political strategy work is done. This area could use a good edit. Ample resource was allocated to buying outside expertise to "get out of trouble".

Key people involved at JP Morgan[edit]

Board (especially the Risk Policy Committee and Audit Committee) BEFORE and AFTER. Was there real impact? See the Dimon memo for internal control as job #1, the new risk control center at HQ, etc. Other reaction items. Other "people" issues that are open are the criminal investigations, Whale cooperation with justice department. More on Grout.

JPM organizational structure, risk systems, accounting and internal control[edit]

This area will need a lot of content attention. Before and after. How, in some detail, will SarOx requirements be met by JPM. What is the standard and how far were they deficient? How will all the 4 C&D PARTICULARS be implemented at JPM (see all the C&Ds)

Conference calls, news releases, 8-K filings[edit]

This area is largely settled except for final disclosures in the following: earnings calls, financial statement discussions (MD&A), more 8-Ks, CFTC to come

Impact on Volcker Rule implementation[edit]

To big to jail too big to fail. Dimon attempting to "streamline" JPM by reducing suppliers, cutting off peripheral divisions, cleaning up tainted relations with corrupt foreign correspondent banks, "know the customer", exerting control over operations, etc. Needs more material and solid edit. Will there be congressional response to the totality of the investigations? (New laws?) Will FSOC / OFR agendas be colored by what's transpired here. Also, impact on FUTURE SEC and CFTC laws, rule-making and enforcement.

Investigations[edit]

I'd let this section remain open for up to six months after the CFTC issues its final order and all the FBI/Justice Department cases come to a reasonable rest. This is still a potentially very dynamic area. Also the sheer volumes of material in here is daunting to intelligently digest.

Lobby Efforts and Government Relations[edit]

This section was largely part of JPM's early strategic response. It could be rewritten and finalized as the strategy and up front work is basically over (with the exception of CFTC and Justice department.) Could be combined with outside council. Clue - "follow the money". A great deal was spent on strategy, influence, and "access".

Class Action[edit]

I'd expect this to proceed rapidly, especially with the confession of guilt extracted by the SEC. Sections of Article that are stable and can now be edited into formal encyclopedia format

Delinking from JPMorgan_Chase#Multibillion-dollar_trading_loss while article is in draft form.[edit]

Hello. As this article seems to be in draft form I have removed the link from JPMorgan_Chase#Multibillion-dollar_trading_loss for now (JPMorgan may appear on the front-page ITN template within a few hours). Once you feel this article is ready, please re-add this link. Cheers, --LukeSurl t c

Page Stats[edit]

>50k page views in the last 90 days, with major spikes on news release days. 90 Day-page views

Yes. 150k of copypasta and word salad will get a lot of google hits, especially when it's related to current events. However, let's not get distracted by readership numbers - if more people land on this page, that makes it more important to fix the problems. bobrayner (talk) 17:54, 20 September 2013 (UTC)

9-20-2013 Wholesale elimination of content[edit]

Article was vastly edited (>90% of content deleted, and 90 direct news and large, primary source document references were reduced to 27) in an attempt to greatly simplify and condense prior content. I took a snapshot of the larger, more comprehensive version and put it in a user space if anyone is interested in greater depth. User:Rjlabs/2012_JPMorgan_Chase_trading_loss. The reduced version here is a quick read, however, due to the massive and hasty deletions, I'm not sure its ultimately well informed or balanced. Rick (talk) 13:25, 21 September 2013 (UTC)

Bruno[edit]

It seems that Bruno Iksil is not being prosecuted over $6.2 billion losses. — Preceding unsigned comment added by BlackWhiteSea-snake (talkcontribs) 08:37, 19 February 2014 (UTC)