Like many others, I frequently receive e-mails that are all about phishing for my personal data so someone can defraud me of money from my bank accounts. But it appears that banks have also been active with fraudulent activity – not through phishing but through spoofing. And their spoofing activities are proving to be costly as JP Morgan paid a fine of nearly $1 billion as announced last week in the Financial Times. This is yet another example of how banks create financial costs from inappropriate behaviour and culture. And if you were an investor in JP Morgan the appropriate next question would be how much of that fine was recovered from bonuses paid to the individuals involved. I suspect not one red cent.
In a further article in the Financial Times it was noted: “US authorities criticised JPMorgan for failing to fully co-operate at the outset of their inquiries. The Department of Justice noted that the bank began suspending suspected traders on its metals desk only after a second person had pleaded guilty.” This article noted that the issue is not only for JP Morgan but has also impacted Deutsche Bank where two traders were found guilty of similar behaviour and are facing up to 30 years in jail. And so just a banks want us to be cautious about phishing, it seems like it is also time for them to be cautious about their own spoofing.
