On 20th May it was announced that five of the world’s largest banks are to pay fines totaling $3.6bn for charges which include manipulation of the foreign exchange market. These fines are a new high (low?) watermark for regulatory penalties imposed on financial sector companies but it is notable that news headlines about the fines focused on the record size of the fines rather than the fact that the regulators (including US, UK and Swiss authorities) had been forced to take action.

The reason for this focus is clear. The public have become de-sensitised to criminal activity by large listed banks.

The boards of the companies involved have shown this same lack of sensitivity. The announcement of record fines came conveniently just one day after shareholders (only just) approved a $20m pay package for Jamie Dimon, CEO of J P Morgan, one of the four banks to have admitted its guilt when charged with fixing the exchange rate market. The package included a discretionary $7.4m bonus for Dimon.

The materials provided for shareholders ahead of the AGM at which Dimon’s pay was approved included a letter to shareholders from Dimon himself in his capacity as Chairman and CEO of the the company. The letter boasts of “a strong corporate culture” and claims the company “never stopped supporting clients” and “we never stopped doing our job”. Dimon talks about being “a good corporate citizen” and the only reference to illegal activity is to bemoan the fact that the bank gets fined by multiple regulators instead of a single regulator “when one or more employees do something wrong”.

In fact, as the US Justice Department's findings show, employees of JP Morgan were busy breaking the law by participating in a cartel that was manipulating benchmark exchange rates to increase profits.

The word "sorry" doesn’t appear in the 39 page letter. The word fortress appears 5 times and moat 3 times.

Could all of this could be plausibly explained as a timing issue? After all Jamie Dimon could not reasonably be expected to include reference to events that hadn’t yet happened. Unfortunately this week’s fines are not a one-off for JPM, in fact far from it.

During Dimon's tenure as joint Chair/CEO JPM has been fined by regulators or settled out of court for:

1. Failure to properly segregate customer funds and failing to timely report the under segregation to the regulator
2. The mis-selling of auction rate securities to customers
3. Unlawful payments that enabled the company to win business involving municipal bond offerings and swap agreement transactions with Jefferson County, Ala, USA
4. Misleading buyers by failing to inform investors that a hedge fund assisted in picking and betting against securities in a collateralized debt obligation
5. Wrongly foreclosing on home loans to active duty military personnel
6. Rigging the bidding process for reinvesting bond transactions that affected 31 US state governments
7. Violating sanction orders by conducting transactions with people or entities tied to Iran, Sudan, Cuba and Liberia.
8. Processing cheques by size rather than by chronological order so they could charge unwarranted overdraft fees.
9. Foreclosure abuses including shoddy loan servicing, illegal robo-signing, and faulty foreclosure processing
10. Failed systems and controls to prevent fraud by three individuals at the bank "The London Whale" case
11.For confirming the execution of a prearranged trade of ten year U.S. Treasury Note Futures spreads, which was a fictitious sale and non-competitively executed
12. Violating Cotton Futures Speculative Position Limits
13. Misleading investors about the quality of residential mortgages that underlay mortgage backed securities it sold

Claims to be a good corporate citizen don’t sit well with evidence of law breaking.

But not all shareholders concern themselves with the culture of a business or indeed its corporate governance, as is amply demonstrated by approval of JPM’s executive pay arrangements. However even the kind of investor who prefers to put the written part of an annual report in the bin and focus solely on the numbers should be concerned.

The London School of Economics' Cost of Conduct project has estimated the total costs and provisions related to litigation, settlement, fines and other charges for these incidents as GBP 35.7 bn.

Lets be clear, the penalties faced by JP Morgan (and others) are not a cost of doing business, they are a cost of doing business badly.