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Reincarnation on Wall Street: Screw-Ups Never Die

Stocks in this article: JPM

NEW YORK ( TheStreet) -- Nothing succeeds like failure on Wall Street. If you don't believe me, just ask Irvin Goldman.

What? You've never heard of Irvin Goldman? Clearly you haven't been following the $3 billion-and-counting JPMorgan Chase trading loss, which has become a kind of giant whoopee cushion beneath the well-compensated tush of the bank's voluble CEO, Jamie Dimon. Goldman, you see, was the top risk official of the bank's chief investment office when it incurred said loss.

As described in the the Wall Street Journal and Bloomberg on Monday, Goldman is something of a loser. But that never stopped him. Au contraire, I think it may have actually helped his career.

To anyone unfamiliar with the culture of Wall Street, the story of Irv Goldman may seem strange. It makes you wonder: How could this guy have been appointed to manage the risk of a pet store, much less the complex and potentially systemically dissettling derivatives portfolios of a major bank?

Goldman, you see, had done such a lousy job at his previous employer, Cantor Fitzgerald, that he was not only fired for losing scads of money but his firm was actually sanctioned by regulators for not doing a good job of supervising him.

But why should that get in the way of a cozy family tradition? Goldman, who had previously been hired by JPMorgan as a trader, was named in February to fill the post vacated the month before by his brother-in-law, Barry Zubrow, who moved to another high-level position in the company. Well, you know what they say: Time heals all wounds. A full two years had passed since Cantor was sanctioned because Goldman screwed the pooch.

The Cantor case came to a head in 2010, when NYSE Arca fined Cantor $250,000 after finding it failed to supervise Goldman, who engaged in money-losing trades "buying and selling the same stocks in personal accounts that he traded in a proprietary account at the New York-based brokerage," Bloomberg reported. His stock investments, it was found, presented a "conflict of interest that could have affected his investment decisions." The particulars were spelled out in a settlement agreement, naming Goldman only by his title, in which Cantor Fitzgerald agreed to the fine without admitting or denying the accusations.

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