FedUpUSA

Posts Tagged ‘JPMorgan Chase’

It’s been a relatively decent year for financial stocks: they’ve had their best performance since 2003. It’s truly been a boom year, though, in investigations, lawsuits, fines, and settlements at the world’s biggest and most important banks. There are 28 banks on the FSB’s list of systemically important financial institutions, and as Felix writes, “pretty much the whole financial sector is still trading at less than book value”.

What follows is a list of notable accusations, admissions and settlements in 2012 alone. (It’s long, so just scroll down if you just want the links):

Bank of America: the US Justice Department is seeking $1 billion in fines for troubled loans sold to Fannie and Freddie; MBIA’s lawsuit against Countrywide, which was disastrously acquired by BofA, rolls on; BofA is one of five banks participating in the $25 billion national mortgage settlement. (Price to book: 0.56, here and throughout via Yahoo Finance)

Bank of China: the families of Israeli students killed in a 2008 terrorist attack are suing the BOC for $1 billion “intentionally and recklessly” handling money for terrorist groups.

Bank of New York Mellon: a subsidiary paid $210 million to settle claims it advised clients to invest in Bernie Madoff’s ponzi scheme; the DOJ continues to investigate possible overcharges for currency trades that it says generated $1.5 billion in revenue. (Price to book: 0.86)

Barclays: $450 million settlement in the Libor scandal; also fined by the FSA for mis-sold interest rate hedges. (Price to book: 0.72)

BBVA: settled overdraft suit for $11.5 million. (Price to book: 0.83)

Citigroup: settled CDO lawsuit for $590 million; one of five banks participating in the $25 billionnational mortgage settlement; paid $158 million to settle charges it “defaulted the government into insuring” risky mortgages. (Price to book: 0.62)

Credit Suisse: sued by NY state for allegedly deceiving investor in the sale of MBS. (Price to book: 0.85)

Deutsche Bank: settled a DOJ mortgage suit for $202 million; FHFA fraud case is ongoing. (Price to book: 0.56)

Goldman Sachs: FHFA fraud case is ongoing; after a ruling by federal appeals court, a class action lawsuit over MBS will go forward. (Price to book: 0.91)

Crédit Agricole: sued by CDO investors two times. (Price to book: 0.35)

HSBC: settled money laundering charges for $1.9 billion; set aside $1 billion for future settlements related to mis-selling loan insurance and interest rate hedges in the UK; Libor settlement still to be reached. (Price to book: 1.17)

ING: settled charges that it violated sanctions against Iran, Cuba, etc. for $619 million. (Price to book: 0.5)

JP Morgan Chase: being sued by NY state for MBS issued by Bear Stearns; class action lawsuitand criminal probe over failed derivatives trades in its Chief Investment Office; one of five banks participating in the $25 billion national mortgage settlement. (Price to book:0.87)

Mitsubishi UFJ: paid an $8.6 million fine for violating US sanctions on Iran, Sudan, Myanmar and Cuba. (Price to book: 0.54)

Morgan Stanley: fined $5 million for improper investment banking influence over research during Facebook’s IPO. (Price to book: 0.63)

Royal Bank of Scotland: $5.37 billion shareholder lawsuit related to 2008 rights issuance; set aside $650 million to cover claims it mis-sold payment protection products; also fined by the FSA for mis-sold interest rate hedges. (Price to book: 0.28)

Santander: fined by the FSA for mis-sold interest rate hedges. (Price to book: 0.77)

Société Générale: rogue trader Jerome Kerviel loses appeal his appeal 3-year sentence for trades that generated $6.5 billion in losses. (Price to book: 0.45)

Standard Chartered: $340 million fine paid to NY state department of financial services for allegedly hiding the identity of customers in transactions with Iran and drug cartels; $327 million paid to the Federal Reserve and US Treasury’s anti-money laundering unit.

State Street: fined $5 million for lack of CDO disclosure. (Price to book: 1.09)

UBS: $1.5 billion Libor fine and two traders criminally charged; rogue trader responsible for $2.3 billion loss found guilty of false accounting. (Price to book: 1.12)

Wells Fargo: Federal lawsuit over mortgage foreclosure practices ongoing; paid $175 million over mortgage bias claims; one of five banks participating in the $25 billion national mortgage settlement. (Price to book: 1.29)

Ben Walsh – Reuters

I was thinking about titling this post “Fire Jamie Dimon.”  I changed my mind because this article is much, much bigger than Mr. Dimon.  This is really an article about the current climate of fraud, negligence and incompetence that is accepted as the new normal.  Dimon and JP Morgan Chase are just the larger-than-life faces of the profound problems that are not getting fixed.  JP Morgan is the nation’s biggest bank; so, for the sake of simplicity, I just want to use JP Morgan and its CEO, Jamie Dimon, to illustrate what is really stopping the economy from getting better.  This is the 8,000 pound elephant in the room that nobody wants to even acknowledge.

Look no further than this past year.  There are big examples that come to mind that should have brought some criminal charges against bank personnel, or at least been grounds to fire Mr. Dimon.  Most recently, JP Morgan and Credit Suisse paid nearly $417 million (combined) to settle civil fraud charges by the Securities and Exchange Commission (SEC).  Reuters recently reported, “JPMorgan will pay $296.9 million, while Credit Suisse will pay $120 million in a separate case, with the money going to harmed investors, the U.S. Securities and Exchange Commission said.  Both settlements addressed alleged negligence or other wrongdoing in the packaging and sale of risky residential mortgage-backed securities . . .” Of course, both JP Morgan and Credit Suisse didn’t admit guilt, and no individuals were charged criminally.  The Reuters story went on to say, “On a conference call with reporters, Robert Khuzami (SEC enforcement chief) said it is hard to bring cases against individuals over ‘structured’ financial transactions because different people work on different aspects, making it hard to pin blame.”  (Click here for the complete Reuters story.)  It was the same story in 2011.  According to Reuters, “JPMorgan had in June 2011 agreed to pay $153.6 million to settle a separate SEC fraud case over its sale of mortgage securities to investors, also without admitting wrongdoing.”  Anybody see a pattern here for JP Morgan or government prosecutors?

Hey, you know what else makes it “hard to pin blame”?  Lots of cash donated to both parties by banks like JP Morgan.  So much cash that the boss will come down hard on prosecutors who bring charges.  One thousand financial elites were successfully prosecuted in the wake of the S&L crisis 20 years ago.  It was 70 times smaller than the 2008 financial meltdown that was caused by greedy bankers.  The “$296.9 million” paid by JP Morgan didn’t even come with an apology, let alone criminal charges for individuals.  This certainly didn’t fix anything, but it did let bankers and Jamie Dimon off the hook–once again.  Is this the business plan that Jamie Dimon condones?

Remember the $2 billion “London Whale” trading loss Mr. Dimon apologized for back in May just before shareholders approved a $23 million pay package for him?  That $2 billion loss turned into more than $6 billion.  That’s triple the original amount Dimon himself announced!   He missed by more than $4 billion!  Did he mean to mislead or is he just incompetent?  Was Dimon negligent as a CEO for allowing these kinds of losses?  Now, JP Morgan is suing its own former employees involved in the scandal, and JP Morgan will not comment on the lawsuit.  A recent New York Times story reported, “Since announcing the problem in May, JPMorgan has worked to reassure skittish investors. The bank has broadly reshuffled its management ranks and united some of its business operations.”  (Click here for the complete NYT story.)  Shouldn’t Mr. Dimon be “reshuffled”?  I mean, just before a big payday, he told shareholders the loss would be $2 billion when, months later, it turned into more than $6 billion.  Why didn’t Dimon know about this?  Where was his supervision? This is one of the nation’s top bankers, and he doesn’t know if a loss is $2 billion or $6 billion?

What about the LIBOR (London Inter-bank Offered Rate) interest rate rigging scandal that erupted earlier this year?  Once again, JP Morgan is involved.  I wrote about this back in July and said, “The Libor interest rate rigging scandal is being called the biggest financial fraud in history.  Libor is a key interest rate that is used globally to set as much as $800 trillion in transactions.  It is used to set interest rates for things such as credit cards, student loans, mortgages, corporate bonds and hundreds of trillions of dollars in derivatives.”  (Click here for the complete post.)  In August, the Huffington Post reported, “Pretty much everybody in the world with subpoena power has hit JPMorgan Chase with requests for information in the Libor-rigging scandal. . . . JPMorgan also said it was the subject of a large and growing number of lawsuits coming out of the Libor mess. State and local governments, for example, are suing banks for keeping Libor too low, hurting the value of interest-rate swaps they bought to protect against rising rates.”  (Click here for the complete Huffington Post story.)  Again, Dimon does not know what is going on in his own bank, or is this part of the business model that he condones?

All the above mentioned stories happened in just the last year or so.  The thing they all have in common is that Jamie Dimon was and still is–in charge.  When the captain of a ship keeps running aground and the ship owners keep patching the hull, when is it more practical to replace the captain?  Hasn’t Dimon run the bank aground on several occasions?  Aren’t the other banking executives crashing their boats into the rocks?  Don’t get me wrong, I think Mr. Dimon should be fired, but that’s not going to happen.  The mainstream media will not criticize Dimon or any the CEO of a big bank despite their dismal track records.  If any reporter did, I think they would be fired.   The public accepts this behavior, and our own government officials enable the fraud, negligence and incompetence to go unprosecuted and unpunished in the banking industry.  The economy will never truly recover against this kind of financial backdrop.

Greg Hunter – USA Watchdog

No folks, it’s not just one bank.

It appears it was basically all of them.

If you transacted in any loan that was tied to this rate at any time in the last several years, you probably got rooked, whether it was for pennies or thousands.

According to the WSJ:

Other banks that have disclosed they are under investigation include Citigroup Inc., C-2.77% HSBC Holdings HBC -3.88% PLC, J.P. Morgan Chase JPM -3.45% & Co., Lloyds Banking Group LLOY.LN -5.79% PLC and Royal Bank of Scotland Group PLC. None of these banks have been charged with any wrongdoing in the matter by U.S. or U.K. regulators.

Isn’t that special?  Why yes, it is.

Now if we could just see something approaching accountability.

But we won’t, you know, just as we didn’t when JP Morgan was involved in the disastrous Jefferson County Alabama scheme that landed several local folks in Alabama in prison on various corrupted-related charges.

The people — who got screwed blind and sideways with permanently-larger sewer bills as a result of the corruption, got nothing back from the banksters – they are still paying for the screwing they had inflicted on them.

I’m not one for vigilante justice, but one does have to wonder — at what point do the people simply stop putting up with this crap?

$2 billion eh?  I said 20 when it was first announced, and maybe more.  Now it looks like after several “revisions” (all higher) the current “estimate” is that it might be $9 billion.

Morgan Chase & Co. (JPM) fell more than 6 percent in European trading after the New York Times (NYT) reported the lender’s trading losses from credit derivatives may total as much as $9 billion, exceeding the firm’s initial estimate.

Exceed?  By more than 400%, right?

Usually one would say that something “exceeded” an original estimate if it was 10 or 20% higher.  What’s 450%?  I’d say that the original “estimate” was a complete load of crap, or if you prefer, a lie.

Of course the other alternative is that Dimon had absolutely no clue what the final exposure might be and simply pulled a number out of his ass.  That wouldn’t shock me either.

The stock is down a buck pre-market.

Disclosure: No position but if we were to ever see anyone held to account for this sort of crap I’d go long handcuffs, leg irons and iron maidens.

At first I thought this was just another one of ‘those videos’….you know, another one about the Federal Reserve, Jekyll Island, evil Joos, etc. Uh…no. This video examines history MUCH further back and when it comes to history, specifically American history, I’m no slouch. This film taught me things of which I had NO IDEA. It’s hard to stun me with anything regarding the depths of economic and government corruption these days, but this one shocked me.

I cannot say that 100% of this film is accurate, but I can say that the first thing I was impressed by was that right out of the gate, it gets it right about the debt vs. production (they run in opposite directions) and its presentation of the QUANTITY or VOLUME of money in the monetary system being the key to control of governments. It was also impressive that they got the Thomas Jefferson quote RIGHT! (The one that is widely circulated alleging that TJ made a quote talking about inflation and deflation is bogus.) I also spent a bunch of time fact checking some of the other points in history with regard to certain people mentioned. The facts presented about the random people I chose, DID verify, despite picking some I thought were going to be blown out of the water.

Bottom line: This film is worth every minute of its hour and a half run time. If you THOUGHT you knew it all about how controlled we are, you still don’t know the half of it.

Discussion (registration required to post)