For the past 10 years, investment banks have enjoyed a veritable free-for-all, trading, churning and
making manipulating markets however they wished to goose profits. Any time regulators did caution or confront them, banks were able to pay modest fines and carry on without admitting or denying any fault. Today the culture of regulatory tolerance and forbearance is turning and banks are finding themselves in a new world of higher scrutiny. A fresh vigor for criminal investigation and charges by the US Department of Justice of late is a game changer and investment banks are now scampering to divest themselves of trading arms that are no longer feasible in a world of increased legal oversight and accountability.
The Justice Department is investigating whether J.P. Morgan manipulated energy markets, marking the latest legal hurdle for a bank already facing a mountain of litigation and regulatory scrutiny. Here is a direct video link.