JPMorgan Chase, the biggest bank in America, announced a loss of two billion dollars on a massive trade placed out of its London office. A trader at JPMorgan had accumulated a position so large that it affected the entire market. The trade involved an index of corporate credit default swaps. Default swaps are insurance policies that pay off if a company can't make payments on its debts. JPMorgan took a huge hit when it tried to back off from the trade and had to sell at a loss. http://www.npr.org/.
The U.S. Securities and Exchange Commission (SEC) is a federal agency and holds primary responsibility for enforcing federal security laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States. Currently, the SEC is responsible for administering seven major laws that govern the securities industry. Under the Securities Exchange Act of 1934, persons and/or corporations that make material omissions or misrepresentations can be charged in civil actions by the SEC as well as criminal securities fraud actions by the Department of Justice.
Securities of Exchange commission fined several companies for fraud. Under the Securities Exchange Act of 1934, persons and/or corporations that make material omissions or misrepresentations can be charged in civil actions by the SEC as well as criminal securities fraud actions by the Department of Justice. The SEC's continued focus on insider trading and innovative investigative techniques demonstrates our commitment to pursuing potentially suspicious trading in a variety of contexts. While recent innovations in the Division of Enforcement are enhancing our ability to obtain that evidence, to establish liability we must satisfy each of the elements of an insider trading violation, including the development of the information, the nonpublic nature of the information, the presence of science, and a fiduciary or other duty of trust and confidence that was violated by the trading or tipping.