I made the point years ago to my partners that as a point of logic the large dealers are severely restricted in their ability to manage themselves.

The reasoning is as follows:

Any one of the many top traders working full time in their specific area of responsibility necessarily know a lot more about it than any manager possibly can.

In other words, any manager will have his hands full keeping up with what any one of the traders is up to, making it impossible, for all practical purposes, to keep up with all of them.

So shareholders should expect things to periodically malfunction from lack of sufficient oversight and supervision as a point of logic.

JPMorgan Sought Loophole on Risky Trading

By Edward Wyatt

May 1 (NYT) — Soon after lawmakers finished work on the nation’s new financial regulatory law, a team of JPMorgan Chase lobbyists descended on Washington. Their goal was to obtain special breaks that would allow banks to make big bets in their portfolios, including some of the types of trading that led to the $2 billion loss now rocking the bank.