Wall Street Banks Lying Just Business as Usual
Wall Street executives lie and people yawn. In a recent appearance, JP Morgan CEO Jamie Dimon admitted yet another incident where a bank's employees lied to make the bank's financial reports look better. It's striking how little impact this admission and others like it have on shareholders, potential investors, Board members, and the media.
If you remember, I recently noted the lying that was behind the resignation of Barclays CEO Bob Diamond. My point there was to bring to the front what seemed to be lying in the background. It's not that Bob Diamond's actions in manipulating LIBOR weren't being reported. It's that the way they were reported minimized the stark fact that in order to manipulate LIBOR he and others had to lie. They lied to make their bank look better. And that's just why the folks at JP Morgan lied about the losses they suffered from a recent derivatives trade. (You can read the WSJ story by clicking HERE.)
My point in focusing on lying here and in my previous post is that I've noticed that when the media reports that people lied, there's hardly any consequence to their lying. Indeed, JP Morgan stock rose after Dimon reported that his employees lied to make the bank look better by not reporting the extent of the losses on the derivative trade.
Frankly, I don't really care if the stock rose as much as I care about the silence. By silence, I mean that after reports of lying, there's no comment or reaction from anyone about the lying itself. It's almost as if people just accept the lying as a mere "tactic" of some sort. If people lied to make themselves or their company look better, it's to be expected. After all, we all lie, don't we?
And indeed, many of us do lie. We're all sinners, after all. But facing the fact that you too may have lied and that you too are a sinner doesn't then mean that you accept the lies of others. Shouldn't there be some sense of outrage at the lying that's gone on in these two incidents? Shouldn't people face specific consequences of their lying?
If you follow these stories, you'll see that the consequences they face have to do with the damage they cause the institutions they work for. There's no consequence for the act of lying itself.
And don't think I'm being naive here. I know that people lie all the time. I know that lying about financial results isn't just something banks do, or just Wall Street firms do. Again, that's not the point.
Just because we've all lied - again, just because we're all sinners - does not mean that we just accept the lies of others.
Lying is wrong! If you lie, you should be ashamed of the fact that you did. If your boss puts pressure on you to lie "for the good of the company" that's no excuse. I know all about the pressure that can be brought to bear on the individual working in a company to do something that's not right. And I'm no perfect human being myself. But that's not the point. Lying - doing something wrong - should not be tolerated, ignored, glossed over, or minimized, anywhere at any time.
As far as business is concerned, lying to avoid taking a loss or to make a profit is lying just the same. The end doesn't justify the means.
Remember "liar loans"? They lay at the root of the sub-prime crisis that pushed our financial system into that huge crash of 2008. So each person who lied on their loan applications and each broker who knowingly accepted these lies in order to sell the mortgage bears personal responsibility for what happened in 2008.
Can you understand why I'm focusing on the lying in these two incidents? I hope you do.
If you remember, I recently noted the lying that was behind the resignation of Barclays CEO Bob Diamond. My point there was to bring to the front what seemed to be lying in the background. It's not that Bob Diamond's actions in manipulating LIBOR weren't being reported. It's that the way they were reported minimized the stark fact that in order to manipulate LIBOR he and others had to lie. They lied to make their bank look better. And that's just why the folks at JP Morgan lied about the losses they suffered from a recent derivatives trade. (You can read the WSJ story by clicking HERE.)
My point in focusing on lying here and in my previous post is that I've noticed that when the media reports that people lied, there's hardly any consequence to their lying. Indeed, JP Morgan stock rose after Dimon reported that his employees lied to make the bank look better by not reporting the extent of the losses on the derivative trade.
Frankly, I don't really care if the stock rose as much as I care about the silence. By silence, I mean that after reports of lying, there's no comment or reaction from anyone about the lying itself. It's almost as if people just accept the lying as a mere "tactic" of some sort. If people lied to make themselves or their company look better, it's to be expected. After all, we all lie, don't we?
And indeed, many of us do lie. We're all sinners, after all. But facing the fact that you too may have lied and that you too are a sinner doesn't then mean that you accept the lies of others. Shouldn't there be some sense of outrage at the lying that's gone on in these two incidents? Shouldn't people face specific consequences of their lying?
If you follow these stories, you'll see that the consequences they face have to do with the damage they cause the institutions they work for. There's no consequence for the act of lying itself.
And don't think I'm being naive here. I know that people lie all the time. I know that lying about financial results isn't just something banks do, or just Wall Street firms do. Again, that's not the point.
Just because we've all lied - again, just because we're all sinners - does not mean that we just accept the lies of others.
Lying is wrong! If you lie, you should be ashamed of the fact that you did. If your boss puts pressure on you to lie "for the good of the company" that's no excuse. I know all about the pressure that can be brought to bear on the individual working in a company to do something that's not right. And I'm no perfect human being myself. But that's not the point. Lying - doing something wrong - should not be tolerated, ignored, glossed over, or minimized, anywhere at any time.
As far as business is concerned, lying to avoid taking a loss or to make a profit is lying just the same. The end doesn't justify the means.
Remember "liar loans"? They lay at the root of the sub-prime crisis that pushed our financial system into that huge crash of 2008. So each person who lied on their loan applications and each broker who knowingly accepted these lies in order to sell the mortgage bears personal responsibility for what happened in 2008.
Can you understand why I'm focusing on the lying in these two incidents? I hope you do.
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