JPMorgan Chase, the biggest bank in the United States, incurred enormous losses in the summer of 2012 from investment decisions made by its Chief Investment Officer (CIO) worth $5.8 billion. While JP Morgan was the only major profitable bank during the recent economic downturn, the recent losses contributed to intense criticisms since its Chief Executive Officer, Jamie Dimon, opposed stricter regulation in the aftermath of the 2008 economic crisis. However, the bank attributed part of the loss to sloppy but well-intentioned business strategy for managing financial risk. The huge losses demonstrated that big banks are still unable to understand the threats or risks posed by their own speculation. JPMorgan Chase filed falsified first quarter reports to the Securities and Exchange Commission in attempts to cover the loss. Preventing High-Risk Gambles in Securities/Banking:

The Securities and Exchange Commission increasingly focused on the huge losses at JPMorgan Chase and argued that the situation provided proof that financial institutions need new legislation to help them deal with irresponsible actions that contribute to numerous losses (Shell, 2012). The need for such actions and regulations is also fueled by the fact that irresponsible investment decisions and action partly contributed to the 2008 global financial crisis. According to SEC chairman, Mary Schapiro, the bank lost five times the amount they claim financial regulation costs them in a single set of transactions.

One of the major responsibilities of the Securities and Exchange Commission is to safeguard investors, maintain fair, organized and efficient markets, and ease capital formation. The achievement of these goals requires the commission to take some measures that promotes its effectiveness in preventing high-risk gambles in banking or securities, which is a foundation of the economy. The major measure of preventing such risky gambles...

The disclosure of important financial information in turn helps investors to make sound decisions and avoid risky gambles when making investments. In contrast, the Commodity Futures Trading Commission controls the option and commodity futures markets in order to safeguard investors from manipulation, improper business practices, and fraud. These administrative agencies were involved in investigating JPMorgan Chase's massive losses with regards to financial disclosure and reporting and access to public money. Moreover, the agencies take action to prevent high-risk gambles in banking or securities by proposing the enactment of new rules that focus on businesses that trade over $100 million annually (Liberto, 2012).
Elements of a Valid Contract:

According to Bagley (2012), a contract is a legally enforceable agreement or set of promises in which each party is held liable or has certain legal rights against the promise or other party in the agreement (p.172). As a critical part to the conduct of business, a contract consists of four major elements including an agreement between the involved parties through an offer and acceptance. The other elements are valuable things or considerations that support the parties' promises, parties' capacity to enter into a contract, and a legal purpose. Every contract implies the duty of fair dealing and good faith, especially in the banking relationship between consumers and banks. In this case, consumers have the responsibility of understanding the terms and conditions of services offered by the bank while banks have the responsibility of knowing who to provide their services to and specific rates for the provision of such services.

Intentional and Negligent Tort Actions:

A tort is defined as a civil wrong that contributes to injury to an individual or property…