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Wednesday, July 11, 2012

Columnists Say "Eh" to NYTimes' JPMorgan Exposé

News summary by MFWire's editors

After the New York Times cried "shame, shame" on JPMorgan Chase last Tuesday, columnists from various media — plus an editorial from the Times itself — have since shrugged, going, "so what?"

For the most part, writers were mostly unfazed by Susanne Craig's and Jessica Silver-Greenberg's report on how JPMorgan pushed sales of proprietary mutual funds to make up for lost profit. Funds often underperformed or charged more compared with those of competitors, they reported.

Suzanne McGee iterated in the Fiscal Times, "the kinds of comments about a conflict of interest in the asset-management division seem mostly to simply revive longstanding concerns that have been the target of independent advisers for well over a decade, rather than add fresh fuel to the fire." Marek Fuchs of TheStreet seemed most unimpressed.

"As a trader, you need to get a bead on whether this will be the next scandal to fell Wall Street firms. The answer is a resounding no," Fuchs wrote. Then, "With apologies to the hyperventilating media," Fuchs advised the public to "relax on this one."

Critics agreed with the original piece that JPMorgan is, in the words of McGee, "no paragon of virtue." However, they pointed out that it's been difficult for the SEC to impose fiduciary duty on firms, meaning that brokers can dance around current rules to recommend "suitable" investments — wording that allows enough leeway for them to pitch investments that boost their own profits — all they want.

An editorial from the Times mostly takes the side of its fellow story from the paper. But it, too, pointed out that there seems to be no solution to the problem, at least for now.

Jill Schlesinger for CBS MoneyWatch, also pitched in on the dialogue about the NYTimes story, reminiscing — unfavorably, that is — about sale contests back in '99.

"A New York Times story on Tuesday read as if it had been unearthed in a Wall Street time capsule," she wrote. 

Edited by: Irene Park

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