JPMorgan Chase Essay Example | Topics and Well Written Essays - 1250 words - 3

JPMorgan Chase - Essay Example However, in some cases when there is massive fraud involved in the bank transactions or the investment decisions then the bank managers try to conceal the whole matter through different tactics. Similar thing happened with one of the biggest banks of United States of America i.e. JP Morgan Chase. In this case the bank had undergone a massive monetary loss. The Chief Investment Officer (CIO) at the bank declared a loss of 5.8 billion in summers of 2012. However, when the investigating agencies looked in to the matter then they were not provided with sufficient records or data related to different transactions and the overall investment decisions which JP Morgan Chase had made in the recent times. The Securities and Exchange Commission was basically responsible to investigate this case but they were provided with falsified information from the key executives and the chief investment officer. SEC and CFTC In the contemporary world economies are based upon the productivity and sound perf ormance of financial and banking sectors. However, these sectors are the most sensitive areas and prone to significant gambling due to the involvement of huge monetary amounts. There are several agencies primarily responsible to prevent financial sectors from possible gambling and their subsequent consequences. These include The Securities and Exchange Commission (SEC), The Commodities Future Training Commission (CFTC) etc. These agencies take the first line actions so as to protect the financial processes and also to investigate the cases of gambling such as the one which took place in JP Morgan Chase. Recently SEC and CFTC have developed a cooperative advisory committee in order to effectively and efficiently investigate the regulation issues and the fraud cases. First of all they are required to detect the rising regulatory risks, subsequently followed by evaluation and quantification of these risks and their broad impacts over the financial sector and the overall economy. Moreov er they are responsible to advocate investors and the major market players (CFTC-SEC Joint Advisory Committee, 2013). Valid Contract In broader terms contracts are defined as the legal obligation which is constructed between two parties so as to make their agreement associated with the law. In this way both of them are entitled to refrain from breach of contract law and also to pay penalties in case of frauds. Therefore parties willing to enter into a contract are required to fulfill the following requirements (Walston-Dunham, 2011): Involvement of two parties: The contracts are not made on individual basis hence there must be two parties involved in a valid contract. Legal capacity: This indicates the mental and physical abilities of both members to fulfill legal obligations i.e. their age and psychological state must be in accordance with the requirements. Individuals below 18 years of age cannot enter in to a valid contract while on the other hand mental patients are also ineligi ble. Offer: One of the two parties must make an offer to another party. This offer is regarding the nature of operations they both want to perform under the valid contract. Acceptance: The offer made by the first party must be accepted by the other party so as to prepare a legal contract. Intention: This indicates the real intention of both parties to legally bind their agreement. If either of them fails to represent a clear intention then the contract might not be made. Consideration: In order to verify