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JPM list of criminal activities...



March 27, 2013 – Comments (2) | RELATED TICKERS: JPM

J P  Morgan is  out  of  control  !!!

It’s hard to summarize all of the documented instances in this report of JPM has been breaking the law, but here’s my best shot. I try to keep up on these matters, and yet some of these I’m learning about for the first time:

Bank Secrecy Act violations;

Money laundering for drug cartels;

Violations of sanction orders against Cuba, Iran, Sudan, and former Liberian strongman Charles Taylor;

Violations related to the Vatican Bank scandal (get on this, Pope Francis!);

Violations of the Commodities Exchange Act;

Failure to segregate customer funds (including one CFTC case where the bank failed to segregate $725 million of its own money from a $9.6 billion account) in the US and UK;

Knowingly executing fictitious trades where the customer, with full knowledge of the bank, was on both sides of the deal;

Various SEC enforcement actions for misrepresentations of CDOs and mortgage-backed securities;

The AG settlement on foreclosure fraud;

The OCC settlement on foreclosure fraud;

Violations of the Servicemembers Civil Relief Act;

Illegal flood insurance commissions;

Fraudulent sale of unregistered securities;

Auto-finance ripoffs;

Illegal increases of overdraft penalties;

Violations of federal ERISA laws as well as those of the state of New York;

Municipal bond market manipulations and acts of bid-rigging, including violations of the Sherman Anti-Trust Act;

Filing of unverified affidavits for credit card debt collections (“as a result of internal control failures that sound eerily similar to the industry’s mortgage servicing failures and foreclosure abuses”);

Energy market manipulation that triggered FERC lawsuits;

“Artificial market making” at Japanese affiliates;

Shifting trading losses on a currency trade to a customer account;

Fraudulent sales of derivatives to the city of Milan, Italy;

Obstruction of justice (including refusing the release of documents in the Bernie Madoff case as well as the case of Peregrine Financial).

And, exhale.

The sheer litany of illegal activities just overwhelms you. And these are only the ones where the company has entered into settlements or been sanctioned; it doesn’t even include ongoing investigations into things like Libor, illegally concealing inclusions of mortgage-backed securities in employer funds (another ERISA violation), the Fail Whale trades, and especially putback suits for mortgages, where a recent ruling by Judge Jed Rakoff has seriously increased exposure. While the risks are still very much alive and will continue to weigh on the firm, ultimately shareholders will pay, certainly not executives as long as the no-prosecutions standard holds.

Again, read the report, but two case studies stand out. First, JPM is trying to stick the public with losses related to its purchase of Washington Mutual and its related liabilities. Rosner documents painstakingly how JPM originally accepted the risks and responsibilities with the WaMu deal, and continued to do so for several years. But now that they see the actual possibility of mass mortgage-related putback claims, JPM wants to shift losses on over $190 billion in MBS onto the FDIC. They hope to get out from under as much as $5 billion in losses in this fashion. It’s impossible to logically follow JPM’s claim that they purchased WaMu but not any of its risk-related activities. The case “demonstrates the unwillingness to accept responsibility for their own management failures,” Rosner writes.

Finally, we have the Fail Whale trade, the subject of the Friday Permanent Subcommittee on Investigations hearing. Rosner keys in on JPM’s internal “Task Force” report, which he compellingly characterizes as a complete whitewash. The Task Force was led by the heir apparent to the company, Michael Cavanagh (“like asking Joe Paterno to do the Penn State investigation instead of Louis Freeh,” in the words of former SEC chair Harvey Pitt). It limited the scope of the investigation to late 2011 and 2012, when now-public data clearly shows the problems at the Chief Investment Office going back years earlier, and fully known to senior management at the time. Rosner correctly brings up Sarbox Title III violations in conjunction with this, as top executives annually attested to the accuracy of financial statements now known to be untrue. The Task Force tried to exonerate Jamie Dimon by actually saying in a footnote that he was out of town for a period of time covered by the report.

And this footnote from the Task Force takes the cake:

The description of “what happened” is not a technical analysis of the Synthetic Credit Portfolio or the price movements in the instruments held in the Synthetic Credit Portfolio. Instead, it focuses on the trading decision-making process and actions taken (or not taken) by various JPMorgan personnel. The description of activities described in this Report (including the trading strategies) is based in significant measure on the recollections of the traders (and in particular the trader who had day-to-day responsibility for the Synthetic Credit Portfolio and was the primary architect of the trades in question) and others. The Task Force has not been able to independently verify all of these recollections.

Hey, who knows, don’t believe anything we’re saying, it’s not an investigation so much as an impressionistic collage.

Rosner has compiled an impressive dossier for any systemic risk regulator, if we had such things in more than name only in America. And I trust this will be a contribution to the ongoing debate – there really is one – over whether these mega-banks have become too big to manage, and too corrupt to continue.


2 Comments – Post Your Own

#1) On March 27, 2013 at 6:28 PM, L0RDZ (91.88) wrote:

I'm  no  fan  of  the  corrupt  and  mainly  evil  JPM  empire:

Let  me  tell you of  my  experiences  with  them.

Back  in  the  days  when I was  much  younger,  I  had  the misfortune  of  having a  fradulent double  or  in this  case  triple  charge  made  against  what  was  one  of  my  credit  cards.

It  was  for  an  online  game,  knowing  that  it  was  fradulent,  I  was  expecting  adjucation  and  justice.

But  what followed  was  Chase who  was  the  credit  card subsidiary of  the  evil  JPM  telling  me  that  the  fradulent charges were  fully  investigated  and  legit.

What I  did  out of youthful  inexperience was  to  pay off and  close my  credit card  with  Chase for  everything except  what  was  only a  fifty dollar  fradulent charge  against me.

Long story short  over the span of  many months with  bogus so called  penalties  they  JPM  turned  what was a  50 dollar  fradulent balance  into  suddenly  a  1,000  dollar  balance  they we're suddenly  ready  to  charge  off.

I  made the  poor  choice of  paying  if  memory serves me  right  close  to a  settlement  for  500...    and  rather  than  take  that  crazy amount of  money  and  say  good  things  on  my  credit report.

They  instead  choose  to say  that  somehow  I  was  irrresponsible and  they had  to  write off   unpaid  balances...

Honestly,  given  all the  bad  things  going on with JPM...  how  can  someone  like  its  CEO with the womanly  name...

not  know or be ultimately  responsible ?

Yet he is  given a  free pass  and is treated as  if  he is some saint.

WHY ???

Anyways,  despite  JPM's  attempts  to ruin  me,  my credit score  remains  a  high over 800...

Karma  is  a real  you know what...

When  will  Karma  catch up to the evil doings at JPM and  when will  executives  be  held accountable  instead of  shareholders  and  tax payers ?

Personally  if  that person  (CEO)  with the womanly  like name was  in the spirit of  this upcoming  christian  holiday, say  put on a  cross and made to pay for the sins at  JPM it wouldn't  even  do  justice to all the evils  there...

Luckily,  such people sleep  very well.

Any how  whether in  this life or  the next,  eventually  there will be  a  reckoning  for  wrong  doers...


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#2) On March 27, 2013 at 7:30 PM, L0RDZ (91.88) wrote:

Six  ethics  of   life:

1)  Before  you pray  ~   Believe.

2) Before you speak  ~  Listen.

3) Before  you spend  ~  Earn.

4) Before  you write ~  Think.

5) Before you quit  ~  Try.


6) Before  you die  ~  Live.


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