Hilarious news comes today that JPMorgan Chase was socked with a "record" fine from the United Kingdom Financial Services Authority, the regulatory agency responsible for overseeing the banking industry and protecting the public from its potential depredations.
According to the Authority, the bank "committed a serious breach of our client money rules by failing to segregate billions of dollars of its clients' money for nearly seven years... This penalty sends out a strong message to firms of all sizes that they must ensure client money is segregated in accordance with FSA rules. Firms need to sit up and take notice of this action -- we have several more cases in the pipeline."
Strong message! Take that, Jamie Dimon!
The fine comes to $49 million. Let's see what that would mean to your average citizen. JP Morgan brought in $108.6 billion in 2009, according to its first quarter call. Let's do the math. If you take $49 million as a percentage of that annual income, you get something like this for varying notches on our social ladder:
An annual income of $50,000 would receive a fine of... $22.56. Is that right?
Obviously, an individual raking in $100,000 would be forced to pay twice that. Still seems pretty tolerable, if slightly obnoxious. That's a full tank of gas on your way to your Canadian vacation, unless you drive an RV.
Likewise, one fortunate enough to be making $5,000,000 per year -- probably a CEO or CFO of just such an institution as JPMorgan -- would be required to fork over, what... gimme a minute... a bit over two grand?
Somebody help me. Perhaps I've got it wrong. Those don't seem like anything that would make anybody sit up and take notice... but maybe my calculations are incorrect. Where's a financial person when you really need one?