How Jamie Dimon's New Business Model From Hell Could Take Down Wall Street – Again

http://www.alternet.org/economy/155862/how_jamie_dimon%27s_new_business_model_from_hell_could_take_down_wall_street_–_again_/

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If you want to trade securities at any brokerage firm in the U.S., you’ll need to study intensively for about three months, memorize dizzying rules and regulations, then take a six hour licensing exam. (The exam is so rigorous that it’s compared to the CPA exam. I don’t know if it’s fact or lore, but I was told exam rooms in past decades had puke buckets in the corners. My room didn’t in 1986.) Then, you’ll need to get fingerprinted, pass a background check, register with a host of stock exchanges, make sure you have a supervisor who holds a principal’s license, get approved in each state in which you plan to conduct business, and take ongoing continuing education classes to keep your licenses.

Or, you could skip all of that and earn $14 million a year trading – without a license – stocks, bonds, swaps, options, futures with $374 billion of bank depositors’ money at JP Morgan Chase’s Chief Investment Office – a unit few on Wall Street had ever heard of until it reported losing billions of dollars in May in the same derivative transaction that made AIG a ward of the taxpayer in 2008.

An “Investment” office sans licensed investment brokers is the latest deregulatory mutation on Wall Street. The other mutation is the JPMorgan model to create an art form out of depicting itself as a “fortress balance sheet” while holding $156 billion of capital and $66 trillion (with a “t”) in derivatives according to financial filings for March 31, 2012 with the Comptroller of the Currency.

Ina Drew, the head of the Chief Investment Office at JPMorgan in New York earned $29 million total for years 2010 and 2011. She was paid on a par with a hedge fund manager because, in essence, she was a hedge fund manager. She held no securities licenses so she was ineligible under securities law to supervise others who did hold a license; sort of like an operating room full of unlicensed brain surgeons who never went to medical school.