I Call Coverup and Scapegoating

JP Morgan is now claiming that its traders intentionally deceived them when they lost $2 4.4 5.8 7 billion:

JPMorgan Chase & Co. (JPM)’s announcement that an internal inquiry may show “intent” to misprice trades in a unit that lost $5.8 billion may help a U.S. investigation while putting distance between management and any wrongdoers.

“E-mails, voice tapes and other documents, supplemented by interviews” were “suggestive of trader intent not to mark positions where they believed they could execute,” the bank said in a presentation yesterday as it reported net income fell 9 percent to $4.96 billion. “Traders may have been seeking to avoid showing full amount of losses,” the bank said, noting management had concerns about the integrity of the prices used. The bank didn’t provide evidence to support the allegations.

The U.S. Department of Justice and the Federal Bureau of Investigation in New York in May began a probe of the bank’s trading losses, a person familiar with the matter said. The Securities and Exchange Commission and the Commodity Futures Trading Commission, which regulates derivatives trading, are also examining New York-based JPMorgan’s trading activities, according to people familiar with those probes.

Yes, of course, none of it was senior management's fault, it was all the fault of those damn Eskimos.

Quoting Richard Widmark playing Col. Tad Lawson in Judgement at Nuremberg:

There are no Nazis in Germany, didn't you know that, Judge? The Eskimos invaded Germany and took over. That's how all those terrible things happened. It wasn't the fault of the Germans, it was the fault of those damn Eskimos!

This is such a transperent case of cover-your-ass as I have ever seen.