Leg 100
26th of August, 2013
JPMorgan Chase & Co. is the largest bank in the United States. In the world it ranks the second largest with a total of $2.509 trillion assets. This ultimately makes JPMorgan Chase one of the most trusted banks in America. However, JPMorgan Chase announced a major trading loss of $5.8 billion in 2012. Consequently, administrative agencies like the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) should take action in order to prevent high-risk gambles in securities, banking, a foundation of the economy.
The mission of the U.S. Securities and Exchange Commission is to protect stockholders and preserve fair market trade. The SEC takes an expressive …show more content…
approach in order to assure the securities of America demanding any public company to disclose financial information. This is done in order to help investors avert the risk gambles allowing them to make righteous verdicts when deciding on which companies to invest in.
On the other hand, the Commodity Futures Trading Commission regulates futures and option markets.
Its objectives consist of promoting viable and effective future markets and protecting investors against abusive trade practices and fraud. Both these agencies play a role in inspecting the trade losses in the case of JPMorgan Chase. While SEC is entitled to investigate the suitability and entirety of JPMorgan Chase financial, Chairman Mary Schapiro states that this agency 's investigation is limited. Unfortunate to this case, the faulty trade happened in divisions of the banking that aren 't subject to SEC regulation.
To create a valid contract, there must be a lawful offer by one party and lawful acceptance of the same by another party. Lawful Consideration is the compensation element given by the party contracting to another. The parties to an agreement must be competent and if either of the parties doesn’t have the aptitude to contract, the contract is not valid. There must also be free consent. This means the parties must agree upon the same topic/issue in the same sense. In a banking context such as JPMorgan, this means that the bank could call a loan, refuse funding’s, loans, and setting off …show more content…
accounts.
A contract is a settlement legally bound by law. This bound requires three essential ingredients; offer, acceptance, and consideration. If a promise is broken, either party involved can be liable and take the other party to court. Also, contracts must have legal purpose. The liability in good-faith and fair dealing should be implied in every contract. The mortgage industry has been seen as a great example of how banks need to better understand and follow these types of duty. Bank clients have a responsibility in understanding contracts involved in borrowing money. Banks themselves have the responsibility of knowing who they should lend money to, knowing each person’s bank history and which rates to apply in each individual case. The affiliation between banks and consumers should have been avoided if the duty of good faith and fair dealings was implemented on bonds granted by the bank.
There are two aspects of law that are very important in the banking business; intentional torts and negligent tort actions.
Intentional torts are resolute acts that do harm to another and negligence is “failing to act to rectify a problem that can cause harm to an individual(s)”. Thus, for a claim to be qualified as a negligent act certain components have to be stated as proof. Including acts like assault, battery, defamation, intentional infliction of physical or emotional distress and even false imprisonment. Negligent tort actions hold citizens accountable for their careless action. The difference between both is found in how an intentional tort falls into a category of torts that requires the defendant having possessed the intent to do the act that caused the plaintiffs
injuries.
Mediation in contractual relations usually protects the right to benefiting legally binding agreements. When virtuous grounds exist between the interference of contractual relations and binding agreements as the one stated above of JP Morgan, then the defendant should not be held liable.
Security of a customer 's financial information is very important in modern days. Online banking or E-banking allows people who have bank accounts to conduct their financial transactions on a secure website operated by the institution itself. Most banks advise consumers that they are protected by the Online Banking Security Guarantee, which covers the security a bank account and the security of all personal information within it. Consequently, the responsibly banks hold is very high. Costumers must be ensured they are securely protected at all times, that their information is undisclosed and that any credit history remains only within the chambers of the bank, physically in paper or most commonly today in digitalized files. The use of secure websites has become almost universally adopted.
References
BBC News (2013), “JP Morgan told to pay Blavatnik $50m in damages”, Retrieved from: http://www.bbc.co.uk/news/business-23845347
Fears, B. (2010), “How is an intentional tort different from negligence?”, Retrieved from: http://www.txinjuryblog.com/2010/01/articles/legal-news/how-is-an-intentional-tort-different-from-negligence/
John, P. (2013), “Intentional Torts vs. Negligent Torts”, Retrieved from: http://www.johnwinicov.com/lawyer-attorney-2063126.html
Ryerson, L. (2011) “The Difference Between an Intentional Tort and Negligence”, Retrieved from: http://moobrowncow.blogspot.com/2011/10/difference-between-intentional-tort-and.html
Scott J. (2013), “Essential Elements of Contract Formation”, Retrieved from: https://www.bankofamerica.com/privacy/online-mobile-banking-privacy/online-banking-security.go