ACSBlog

by Samantha Berkovits                   

The U.S. Senate confirmed Paul Watford to a judicial emergency seat on the U.S. Court of Appeals for the Ninth Circuit Monday evening, after Senate Majority Leader Harry Reid moved to force a vote on his nomination. Watford’s confirmation will provide some much-needed relief to the Ninth Circuit, which has more than twice the caseload of the next busiest circuit. But the confirmation vote came only after Reid filed a motion to force a vote – the 27th he has had to file on President Obama’s judicial nominees. Before the scheduled cloture vote, senators agreed to instead hold an up-or-down vote on his nomination and confirmed him 61-34.

 President Obama has nominated Thomas M. Durkin to serve on the U.S. District Court for the Northern District of Illinois. Durkin, a partner at Mayer Brown and former federal prosecutor, has the full support of Senators Durbin and Kirk. He was first suggested as a potential nominee three years ago, and the seat has been vacant since 2010 when Judge Wayne Anderson retired.

by Jeremy Leaming

JPMorgan Chase CEO Jamie Dimon has been a loud, at times obnoxious, critic of serious efforts to strengthen regulations of the financial industry. Specifically he has fought the Volcker rule, which would bar federally insured banks from risky trading ventures, similar to the ones that Dimon’s bank engaged in that led to a multi-billion dollar loss.

Dimon is also on the board of the Federal Reserve Bank of New York, which is instrumental in supervising and regulating financial institutions. A growing number of people, including Treasury Secretary Timothy Geithner, are suggesting that Dimon is unfit to serve on the board of an institution that is charged with checking the actions of JPMorgan, which as The New York Times has noted emerged from the Great Recession as “the nation’s biggest bank.”  

Simon Johnson, former chief economist of the International Monetary Fund, is the latest influential voice to call for Dimon to go.

Writing for The Baseline Scenario, Johnson noting that the NY Fed is a “key part of our regulatory and supervisory apparatus,” concludes that it makes no sense for Dimon to remain a part of the apparatus that “oversees his activities, decisions, and potential losses.” Johnson is asking others to join the effort urging Dimon to resign from the board.

The JPMorgan debacle centers on a trader in London dubbed the “London Whale,” apparently for playing a central role in a risky hedging strategy that led to the announcement of a $2 billion, likely far higher, trading loss.

In a post for his Rolling Stone blog, Matt Taibbi says, “If you’re wondering why you should care if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon, here’s why: because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.”