So yesterday I read an interesting article in the Wall Street Journal about JP Morgan Bank. It had to with some pending charges and possible indictment over some trading activities of two of its traders based in France and Spain.
It was the same type of article that does appear more frequently than not and it goes something like this: Traders do trades and speculate into financial losses in the millions and billions of dollars, there was no oversight over their activities and lots of money is lost in the process.
By the way this also a function of free, capitalistic markets where money is made and money is lost in the course of business, strategy and market endeavors.
But lets move on...
For some time I was following Coal and how some of the market manipulation affected this commodity. Well, from what I’m reading also in the Wall Street Journal is that millions of dollars have been lost on this commodity in the past twelve months by speculators being short instead of being long. In other words they were “betting” that the price would decline instead of increase.
So of course I’m reading this and wondering who exactly is going to be pressing these charges against the traders at JP Morgan Bank. A natural direction might be the CFTC, the U.S. Department of Justice, Department of Commerce, etc.
It was a subcommittee of the U.S. Senate.
I couldn’t believe what I was reading: a subcommittee of the U.S. Senate actually has the authority to press charges for trading activities of the U.S. based bank.
Then the article raised another interesting issue: Extradition.
The traders, from France and Spain, if charged, would have to be extradited to the United States.
I wonder if subcommittees of the U.S. Senate have extradition authority.
What other kinds of powers do they have?