Forum Post: Gaming the System

Ever since the Code of Hamurabi, the pride of western civilization is that its systems are based on law. How do people gain advantage for themselves at the expense of others in a society where laws regulate behavior? And how do they do it without breaking the law? Wall Street excels at gaming the system. It happens inside the confines of each investment house lining the street. They're all required by law to keep extensive "compliance" codes.
Competition with great rewards motivates people. Each firm has its wizards who look for an edge without breaking the rules.
It's called Gaming the System. Gaming the system is easier when we deregulate. It's easier in a society that believes 'winning isn't everything, it's the only thing.' There is no reward for taking lower profits by doing business ethically. Think about that. In 2010, JP Morgan and the SEC reached a settlement over allegations that JPM defrauded its clients in 2007 at the outset of the real estate meltdown. JPM paid a fine of $550 million (biggest ever) to the SEC. $300 million went to the Treasury. $250 million went to the clients who lost at least 4 times that amount. JPM is also supposed to "modify its business practices." This is just part of the cost of doing business for JPM. The $550 million fine was just 4% of the $13.5 Billion they earned in the prior year. What if there was a way to transfer profits to firms with a clean record?