JPMorgan Chase

Short Essays on the JP Morgan Trading Losses of the summer of 2012 Name Institution Affiliation Course Date of Submission JP Morgan 1. Discuss how administrative agencies like the Securities and Exchange Commission (SEC) or the Commodities Futures Trading Commission (CFTC) take action in order to be effective in preventing high-risk gambles in securities / banking, a foundation of the economy. Organizations such as the Securities Exchange Commission and the Commodities Futures Trading Commission are independent agencies that are legally charged with regulating and providing guidelines for the trading and or exchanging of the goods and services within their respective jurisdictions. The Securities Act of 1934 has fully empowered the SEC to do a periodic evaluation of reports from companies that publicly trade their securities. The same act hands the SEC the powers to discipline individuals and entities that are regulated if found in breach of industry rules and regulation (Mahony, 1982). The Commodities Futures Trading Commission on the other hand was created in 1974 to protect individuals, the public and industry players from manipulation, fraud, and potentially abusive practices while at the same time fostering competitiveness, openness and creating markets that are sound (Teall, 2012). 2. Determine the elements of a valid contract, and discuss how consumers and banks each have a duty of good faith and fair dealing in the banking relationship. There are four basic elements of a contract as Miller (2012) writes. The first important requirement in the formation of a contract is an agreement. In an agreement there should be a party that offers to enter into the legal agreement and another one that accepts the terms of the offer placed. The terms of the contract should contain wording that allows meeting of the minds of both parties that allows them to consciously read and or understand what is in store for them before they can agree mutually to proceed with the agreement. Secondly, a consideration should be made in the value of the actual cost of what is being agreed upon. This consideration can be in the form of love and affection, money (legal tender), goods, services, or any form that the law has a capacity to recognize as a legal way of executing this contract. In addition to an agreement and a consideration, a contract must have contractual capacity. The parties must be recognized by the law as competent and have the ability to stick to the contract as agreed. Both parties must have the mutual capacity to work together as per agreed too. For example, candidates have to be eighteen years or above and must be of sound mind. Married individuals below the age of eighteen are considered adults. However, their contracts could be voidable as a minor until such a time when the law recognizes them as adults. In addition, the law must recognize the characteristics possessed that actually qualify them as parties who are competent. Finally, the contract must possess full legality. The purpose of the contract is to achieve a an objective. This objective or goal, however, must no be illegal or against public policy. That is why the purpose must be clearly defined and understood by all parties involved during the formulation of the contract. As we have seen in the above listed elements of a contract, the efforts that require this fulfillment this are mutual. Banks have a duty to honor contract s signed with consumers on their part and so do the consumers. It is imperative that when formulating contracts the banks, which at most times have more say, provide a way in which consumers contribute in what is at stake. However, the banks must act with a fair dealing policy when handling their customers because they mostly have the power and influence over the consumer. The consumer, on the other hand should be able to read contracts carefully before putting pen to paper. They, consumers, who in most cases, have little say in what the banks have to offer, must read and understand the terms of a contract then act in good faith to honor the terms of the bank if they choose to commit to sign the contract. 3. Compare and contrast the differences between intentional and negligent tort actions. In 2005 Jennings wrote that the major difference between in...