BU Now » Trust and Honesty: America’s Business Culture at a Crossword

J.P. Morgan hit with record U.K. fine

Dick Taffe — Thu, 03 Jun 2010 16:26:33 +0000

British regulators fined investment bank J.P. Morgan Chase a record $48 million for failing to keep client money separate from the firm’s money — from 2002 when Morgan merged with Chase until mid-2009 — which put client money at risk had the company gone insolvent. Law Professor Tamar Frankel, an authority on securities law and author of “Trust and Honesty: America’s business Culture at a Crossroad,” reminds that client money cannot be viewed as the bank’s own.

“The money that clients deposit with a bank to trade on behalf of clients as brokers or any other form of a fiduciary relationship continues to belong to the client — therefore, it cannot be mixed with the bank’s money.”

Contact Tamar Frankel, 617-353-3773, tfrankel@bu.edu

Regulators too close to oil industry

Dick Taffe — Tue, 25 May 2010 22:33:48 +0000

The Interior Department’s inspector general issued a report showing an all-to-cozy relationship between the department’s Minerals Management Service and the oil industry that it was supposed to be regulating. Law Professor Tamar Frankel, author of “Trust and Honesty: America’s Business Culture at a Crossroad” and an authority on legal ethics, says the problem of regulators becoming captives is complex and there should be limits on how much they can accept in gifts from those they’re overseeing.

“There are many other effective ways to nip corruption in the bud. The main point is to recognize that it is waiting in the shadows and to eliminate it before it starts festering and rotting the system.”

Contact Tamar Frankel, 617-353-3773, tfrankel@bu.edu