Jp Morgan Essay

1995 words - 8 pages

JPMorgan Chase Bank Risks

Abstract:
Fraud has remained a predominant factor in the trade of stocks, shares and other securities because of its unpredictability. The government has laid down many structures and developed enormous laws and enforcement agencies to handle the same. JPMorgan investment bank stands as an example of how hard it is to combat high-risk gambling, given that a bank of its standing and success could fall a victim of the same, notwithstanding the implication of its Chief Investment officer in the same. The essence of this is to show the challenges that the administrative agencies are faced with, and the actions and strategies they have laid down ...view middle of the document...

This move has exposed the institution to its competitors who have been placing contrarian bets, hoping to profit from a weakening in the financial institutions. As it turns out, these competitors are not only winning in the betting process but also reaping huge rewards.
The above scenario representing JPMorgan investment bank is a classic example of the high risk gambles that investors are exposed to on a daily basis. With the increasing to grow portfolio, and managements given targets based on the profits and the market share in a given country, nation or target group; top managers of such financial institutions are always tempted to expose the finances of their clients. This they do by making bets that their clients would otherwise not make. The government has developed and instituted various agencies to handle such cases. The idea is to prevent high-risk gambles, and to protect the financial resources as well as the stability and sanity of the major investment institutions, and financial banks (SEC, 2013). In addition, the government has a responsibility to ensure that those responsible for such undertakings take responsibility for their mistakes.
The U.S. Securities Exchange Commission is amongst the various organizations that have been instituted to protect the interests of investors, aiming to ensure that the markets are fair, efficient and conducted in an orderly manner. In addition, it serves in facilitating the formation of capital by aiding the pooling together of resources. Securities, e.g. stocks and bonds are very complicated to deal with. This is because to a large extent, profits are a guaranteed as losses are. This is because they always stand a chance of losing value, and when this happens, there are those who reap profits when they lose value, and those who make losses when the same happens. One of the laws used in curbing high risk-gambling is the law that requires all investors, regardless of the size and the fame of the institutions involved, to be allowed access to the basic and relevant facts on the investment before making a purchase. The key administrative agencies e.g. SEC require that an investor should be given meaningful information on the financial standing of the securities they are purchasing including what prospects they stand to gain (SEC, 2013). The work of the administrative agencies lies in overseeing the key players in the securities world. It enforces this policy by ensuring that investors have obtained full disclosure of the relevant, meaningful and important market related information, in order to cushion investors against fraudulent deals and gambles.
These administrative agencies compile evidence of fraudulent acts done by both individuals and companies, and in enforcing the law; it raises law suits against them. This achieved mostly with heavy reliance on the investors since they are the ones who stand to lose when the deals go sour (Chris, 2013). To achieve the trust and confidence of...

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