giandujakiss | Jul. 3rd, 2012

Jul. 3rd, 2012

So now all the non-bloggy news sources have picked up on the "Did Roberts switch his vote" story, and conservative anger over it. You can read about it here and here and here and here, for starters. And Paul Campos, who blogs at LGM, reports on MSNBC that he has his own source - presumably someone in the liberal Chambers though he doesn't say so explicitly - who disputes the CBS report and claims that in fact, the joint dissent was originally written as a majority opinion by Roberts himself and was abandoned by him. (Yes, I am still skeptical of that, but that's of lesser importance).

Just to clarify - as most of these stories agree, it is not uncommon for Justices to change votes, and sometimes to flip the Court in the process. The news stories give the example of Planned Parenthood v. Casey, but there are plenty of others. Usually, you can figure it out very simply - the Court has a loose system for allocating opinions evenly among the Justices, and a flip breaks the pattern. Or, occasionally, majority opinions that were once dissents might still use "I" instead of "we" when describing the reasoning.

The part that has everyone up in arms - well, conservatives may be up in arms just about the idea of a vote switch, but the part that they're claiming is the problem - is the part of the CBS story suggesting that Roberts didn't switch his vote because he reevaluated the merits of the legal arguments, but because he bowed to political pressure.

That part of the story, it must be emphasized, pretty clearly came from within the Chambers of the four dissenters - I am reasonably confident that if you asked someone in Roberts's Chambers, or the remaining four, you'd get a different explanation for the shift.

But that assumes they'd talk in the first place. Because the jaw-dropping part here is that these leaks are happening at all, and that we're seeing this kind of coverage of the Court's deliberations, just moments after a decision came down. This is exactly the kind of coverage that delegitimizes the Court - and, from the leakers' perspective, was likely intended to do so - which is why it hasn't happened before. In the words of Dahlia Lithwick writing with Barry Friedman:

Given the importance of this case it is difficult to believe [the leak] was just an accident. Yet, a high-level leak on a decision of this magnitude this soon is unprecedented. And, frankly it is rather nauseating to anyone who worries about preserving the integrity of the court.

On the high court, there’s politics and then there’s politicization. There’s a difference between law and politics coming together on the court, and the possibility that someone is working from within the institution itself to further political ends. Or personal pique. Or whatever the heck was behind this apparent leak. The court has always been in politics and has always been politicized, but has remained pretty leak proof precisely because the justices understand the devastating effect this kind of politics will have on the institution.

It's really an incredible institutional breakdown.

(and not for nothing, but doesn't Roberts look eerily like John de Lancie in that Slate picture?)

Crossposts: http://giandujakiss.livejournal.com/1511541.html

Former Brokers Say JPMorgan Favored Selling Bank’s Own Funds Over Others

Facing a slump after the financial crisis, JPMorgan Chase turned to ordinary investors to make up for the lost profit.

But as the bank became one of the nation’s largest mutual fund managers, some current and former brokers say it emphasized its sales over clients’ needs.

These financial advisers say they were encouraged, at times, to favor JPMorgan’s own products even when competitors had better-performing or cheaper options. With one crucial offering, the bank exaggerated the returns of what it was selling in marketing materials, according to JPMorgan documents reviewed by The New York Times.

“I was selling JPMorgan funds that often had weak performance records, and I was doing it for no other reason than to enrich the firm,” said Geoffrey Tomes, who left JPMorgan last year and is now an adviser at Urso Investment Management. “I couldn’t call myself objective.”JPMorgan defends its strategy, saying it has “in-house expertise,” and customers want access to proprietary funds. “We always place our clients first in every decision,” said Melissa Shuffield, a bank spokeswoman. She said advisers from other companies accounted for a large percentage of the sales of JPMorgan funds.

At first, JPMorgan’s chief, Jamie Dimon, balked at the idea of pushing the bank’s investments, according to two company executives who spoke on the condition of anonymity because the discussions were not public. Several years ago, Mr. Dimon wanted to allow brokers to sell a range of products and move away from its own funds. Jes Staley, then the head of asset management, argued that the company should emphasize proprietary funds. They compromised, building out the fund group while allowing brokers to sell outside products.

Now, JPMorgan is devoting more resources to the business, even as other parts of the bank are shrinking. Since 2008, JPMorgan has added hundreds of brokers in its branches, bringing its total to roughly 3,100.

And it goes on in that vein.

The reason this is a crappy story is that it fails to mention that this is actually - horrifically - legal, despite the recommendation of the SEC to change it.

As explained in more detail here, the securities laws distinguish between brokers and investment advisers. Investment advisers have a fiduciary duty to the client - that means they are required to put their clients' needs first. Brokers don't. Brokers have a duty to make sure a recommended security is "suitable" - which means generally appropriate for the client's investment goals and risk appetite - but beyond that floor, they have no duty to put the client's needs first. They often push proprietary products, and they've long been known for pushing products that produce higher commissions, even when those are not as good a deal for the client.

Of course, a lot of investors don't understand that. Even those that do probably don't really process it well - there's some evidence that even when the broker discloses that he/she earns higher fees for a particular product, the client will accept the recommendation to buy that product.

In January 2011, the SEC produced a report recommending that a fiduciary standard be imposed on brokers, but - surprise! - after industry howls, they've gone back to conduct an additional cost benefit analysis. Of course, that might be necessary, since the DC Circuit has started to impose insane cost-benefit requirements on anything the SEC tries to do.

But it's a crappy NYT story, because none of this is mentioned.

Crossposts: http://giandujakiss.livejournal.com/1511848.html

Delaware Schools to Be Barred from Students’ Social Media Lives

Delaware is on the verge of prohibiting schools from monitoring students’ social media activity without their consent.

The state Senate unanimously voted to ban public and private schools from requiring students to allow access to their social media lives, the Los Angeles Times reported. The bill, which also passed the Delaware House, only needs the governor’s signature to become law.

Some colleges and universities have required students to download social media monitoring software on their personal electronic devices or accounts as a condition of their scholarships or participation in athletics.

A recent revision in the University of North Carolina handbook on this matter is said to be typical, according to MSNBC.

Under the Delaware bill, institutions are forbidden from requesting or requiring a student or applicant to disclose any passwords or related account information; asking them to log on to a social media site in the presence of an agent; requiring the installation of a monitoring device that gives the institution access; or requiring the student to add an agent to their contacts.

...a U.S. congressional committee is considering the Social Networking Online Protection Act, which would prohibit employers from requiring job seekers or workers to provide passwords as a condition of employment.

The blurb doesn't get into the specifics - I assume from the description that school administrators are permitted to read things that are publicly posted, and in general, I might be in favor of forcing kids in high school or younger to permit very limited viewing in specific situations (like, say, credible allegations of sexual harassment and severe bullying), but otherwise- I am so appalled this is even necessary.