Wall Street Fined

For the former darling of American finance, as well as the “Howard Hughes of investments,” the economic slowdown is brutal. JPMorgan, Jamie Dimon’s bank, is preparing to pay an unprecedented fine. For his part, hedge fund manager Steve Cohen, nicknamed in reference to the sickly taste of the billionaire aviator’s secrecy, will pay a record fine of more than $1 billion. In both cases, they must deal with the law and settle the proceedings that call their institutions into question.

The hour of reckoning has arrived in American finance. Even the stars of Wall Street are no exception. This proves the determination of regulators to clean up the financial industry. Long accused of laxity, the authorities have raised their voice in recent years. Too late, some would say, to avoid the crisis of the century. In the United Kingdom and France, they are also showing a greater severity. But it’s in the United States that the change is the most dramatic. Particularly in the stock market, market abuse is more severely punished. Investigators have strengthened resources. They can make use of informants who are rewarded financially. The results are there; several hedge funds have had to close their doors.

And with banks, zero tolerance is the rule. The JPMorgan case is symbolic of the legal precedents that are now taking place. There remains a significant challenge for the police to catch this new kind of manipulator in their nets. We refer, of course, to automated traders capable of sending millions of orders in milliseconds, whose operations, when fraudulent, are even more difficult to identify and track.