A Senate subcommittee has produced a 300 or so page document that says that J.P. Morgan Chase & Co. (NYSE: JPM) manipulated information about huge losses in its London trading operations and that management ignored the warnings signs its own systems should have produced.

According to The New York Times, CEO “Jamie Dimon briefly withheld some information from regulators.” If these allegations are correct, it begs the question of why executives at the bank would even bother to lie.

J.P. Morgan released a statement about the Senate documents. It said, among other things, “While we have repeatedly acknowledged significant mistakes, our senior management acted in good faith and never had any intent to mislead anyone.” The bank’s management believes this, or the comments are just a part of a suspected cover up.

J.P. Morgan obviously conduced its own very extensive investigation into what happened as losses mounted in its London trading operation, eventually reaching $6 billion. Did those probes reach the same conclusions as the Senate investigation? Probably not. J.P. Morgan management and legal counsel would have known the federal government would have spotted improper behavior. The bank would have stood to do much better after the crisis by simply making self-critical statements as soon as it had details about its own investigation. The Senate would have people believe that J.P. Morgan and its board swept internal investigation results under the rug and then hoped that astute government investigators would not find them.

Either Dimon tried to pull off one of the great cover ups in modern banking history, or the conclusions of his own investigation have significant differences from those of the Senate committee. The second alternative could mean that there were shades of gray that were subject to alternative interpretations.

However, J.P. Morgan had very little incentive to lie about its trading problems, once it knew the full extent of their causes. If that is the case, the Senate report does not break any new ground at all. It just allows several politicians to grandstand about the state of the American financial services industry by taking facts already in evidence and accusing J.P. Morgan of a sinister lack of disclosure. The bank’s management and board are not that stupid. The Senate probe will find nothing that is really new.

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