Morgan Chase is the biggest bank in the United States of America. In the summer of 2012, the bank announced trading losses of up to $5.8 billion. The loss is attributed to investment decisions of its Chief Investment office. The bank faked reports of the first quarter to hide the great losses as they presented the report to the Commission for Securities and exchange. Here I discuss how the commission is mandated to operate, so as to foresee and prevent theoccurrence of gambles of high risk in banking and securities. To achieve my goal, I will discuss the duty of good faith, the elements of a valid contract, and if I would prevail in a tort action, if my bank, the Bank of America behaved like the JP Morgan bank. Finally, I will look at the measures financial institutions have formulated to protect the software for mobile banking.

The Securities and Exchange Commissionis mandated with taking effective actions, to protect consumers from losses in high risk gambles in banking and securities. The Commission does so through implementation of the Consumer protection Act of 2010, commonly known as the Dodd Frank Act or the Volker rule (Securities and Exchange Commission, 2013). Legislations in the Act empower the commission to prevent financial institutions from owning or investing private equity funds or hedge funds, or even engaging in activities that risk the investments of their clients. The commission also ensures that it achieves its goals by controlling the liabilities held by the largest US banks.A contract is an agreement between two parties that the court can enforce. The parties must adhere to the principles spelt out in the law, lest the court will not enforce. in most of the circumstances, the contract will be in writing so as to spell out the elements of a valid contract. In this spirit, the parties must: have intentions to start a legal relationship, have an offer in the contract, consider the offer and declare acceptance. The parties too must have the legal capacity to contract and the contract itself should be legal. In the case of JP Morgan and the Securities and Exchange Commission, the contract was binding and, therefore, JP Morgan breached the contract.

JP Morgan also acted in breach of good faith. Having the capacity to enter in a contract, JP Morgan Chase had committed itself to act in good faith. However, the act of falsifying results contradicts the principle.JP Morgan Chase, therefore, can be said to have engaged in an intentional tort and breached fiduciary duty in that: it breached a valid contract between a third party and a plaintiff, had knowledge of the contract terms, disrupted the contractual relationship and its action led to damage. Accordingly, if my bank, the Bank of America behaves like JP Morgan, it would be hard to prevail since it will have breached its fiduciary duty.Financial institutions have a responsibility of addressing consumer protection to deal with queries of error in m-banking automation (ITU, 2011). With the emergence of mobile banking, banks have embarked on a rigorous review of quality of services guidelines and also seeking support from financial sector controllers to protect the m-banking software. Automatic tracking of banking activities has also been implemented to achieve the goal.

In conclusion, it is ethical for parties to act in good faith when they have entered into a binding contract. The parties should also maintain their fiduciary duty. Financial institutions have have automatic tracking measures to regulate mobile banking.

References

International Telecommunications Union. (2011). The regulatory landscape for mobile banking. Geneva: International Telecommunications Union.

Securities and Exchange Commission. (2013). Public comments on SEC regulatory initiatives under the Dodd Frank Act. Retrieved from: http://www.sec.gov/spotlight/regreformcomments.shtml

Bank of AmericaAnalyze the strengths and weaknesses of the company Bank of America using ratio analysis status, and present your findings in a paper of 1,500–2,000 words. Include all calculations used in an appendix to the paper.