“Catch Me If You Can” JPMorgue Has 11+ State, Fed & Int’l Enforcement Bodies After It [silvervigilante]

The Morgue is like Leonardo Dicaprio in the movie “Catch Me If You Can.”  The bank has amassed a laundry list of fraudulent activities that have burst onto the radars of numerous governmental agencies and into the public spotlight. Probably, we are looking at a similar outcome as in the movie. Instead of prosecutions, the bank, like Dicaprio’s character in the movie, will probably be merely asked to go to work for the Feds in some capacity to “pay off” their wrongdoings.

 

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JPMorgan Chase & Co. is being investigated by at least 11 state, federal and international enforcement bodies. Officials in Singapore, Germany and Japan are among a list of agencies probing the largest U.S. bank and its trading errors, according to JP Morgan in a filing Thursday.  The U.S. Justice Department, Congress, Securities and Exchange Commission and U.K. Financial Services Authority are all examining the bank, which  could still lose $1.7 billion more on its credit derivatives portfolio, the company said.

“The firm expects heightened scrutiny by its regulators of its compliance with new and existing regulations,” the company said. Regulators will begin to bring “formal enforcement actions for violations of law rather than resolving those violations through informal supervisory processes.”

The Morgue might have escaped the breaking down of their silver manipulation scheme by the CFTC, but that hasn’t kept other U.S. regulators from keeping the pressure on as the bank has been forced to shave 50 basis points off its reported capital levels after having sustained four weeks of trading losses in the second quarter, this on the heels of their “London Whale”  loss reported by the bank earlier in the year. The Morgue said Thursday in a regulatory filing that the Federal Reserve Bank of New York and the Office of the Comptroller “determined” on Wednesday that the bank should amend its reported regulatory capital ratios.

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“Who is Jamie Dimon?”

From a new Vanity Fair/60 Miinutes poll, results for question “Who is Jamie Dimon?”

 

Insider-dealing ring at UBS and JP Morgan facing jail [the independent]

Six men were facing jail terms yesterday after being found guilty by a jury of insider dealing in a ring where employees in the print rooms at UBS and JP Morgan passed on secret takeover deal documents to their trader friends.

Brothers Ersin and Ali Mustafa passed on confidential and price-sensitive information from their printing work, downloading confidential information onto memory sticks for friends who used the information to make spread bets on share prices of the companies involved.

The men made their bets knowing the share prices would rise when the stolen information was made public.

The four-and-a half-month trialwas the longest and most complex prosecution brought by the Financial Services Authority (FSA), involving evidence from hundreds of trading accounts and telephone records.

The men were convicted of making a profit of £732,044 over a two-year period from May 2006. The FSA had prepared further charges but the judge ruled they should not be heard for trial-management reasons – effectively to save the public money on an even longer hearing.

Most of the men’s trading was done through the City Index spread-betting house, often in the names of friends and family in the hope of disguising the suspicious activity.

During the trial, Ali, who worked at UBS, described his older brother, Ersin, as “a wheeler dealer … always looking for the extra buck”.

Ersin, who was at JP Morgan, is currently believed to be in North Cyprus, where the brothers have family.

Ali originally tried to blame other colleagues in the UBS print room but analysis of his computer proved he was definitely the culprit.

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JPMorgan Accused of Manipulating Power Market [allgov]

Raising the specter of Enron’s intrusion into the California energy market a decade ago, theFederal Energy Regulatory Commission (FERC) is investigating allegations that JPMorgan Chase & Co. manipulated the state’s market in 2010-2011 for millions of dollars in windfall profits.

Papers filed in federal court said the bank’s bidding practices may have inflated electricity costs by more than $57 million, but that just covers a six-month period. Some estimates put the cost to utility users as high as $200 million. Those numbers got the attention of theCalifornia Independent System Operator (CalISO)—a non-profit controlled by the state that oversees 80% of the state’s electrical transmissions—although they pale in comparison to the multi-billion-dollar scandal over credit derivatives currently roiling the bank.
Enron’s gaming of the newly-deregulated energy market in 2000 cost taxpayers $1.4 billion.
JPMorgan says it has done nothing illegal and is cooperating with the investigation, but FERC sued the bank on July 2 for refusing to turn over 25 emails it requested. The bank maintains that the documents contain privileged legal advice and are not about the bidding practices under investigation.
FERC has conducted 11 investigations of alleged manipulation of energy markets since January 2011, one of which resulted in a $245 million settlement with Constellation Energy Group Inc. The agency issued a preliminary finding last December that Deutsche Bank AG had manipulated the California market.

JPMorgan Ordered to Identify Witness in Blavatnik Lawsuit [businessweek]

JPMorgan Chase & Co. (JPM) (JPM) was ordered to identify the person with the most knowledge of possible regulatory probes of its J.P. Morgan Investment Management and Chase units related to the labeling of residential real estate- backed securities as part of a lawsuit by billionaire Len Blavatnik, according to a court filing.

Blavatnik, 55, sued New York-based JPMorgan, the biggest U.S. bank by assets, in 2009, claiming it put twice as much money into risky mortgages as his investment guidelines allowed while Chief Executive Officer Jamie Dimon was unloading such securities from the bank’s books. Blavatnik says the bank lost $98 million of his funds.

New York state Supreme Court Justice Melvin L. Schweitzer yesterday ordered JPMorgan to identify the person or provide a sworn affidavit that there is no such investigation after a “thorough and appropriate inquiry” within 30 days.

Blavatnik’s lawyers had served JPMorgan with a notice to name witnesses on a variety of topics, including one related to U.S. Securities and Exchange Commission and regulatory probes of the units, under an agreement to identify witnesses for the purpose of taking depositions in the case, according to Schweitzer’s order.

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Exclusive: Labor Dept looking into JPMorgan stable value fund [Reuters]

(Reuters) – The U.S. Department of Labor is looking into whether JPMorgan Chase & Co (JPM.N) violated its fiduciary duty under the Employee Retirement Income Security Act in connection with one of its stable value funds.

Stable value funds are used in 80 percent of 401(k) self-directed retirement plans and are meant to be the most conservative choice for employees – liquid and backed by insurance.

But, the $1.8 billion JPMorgan Stable Asset Income Fund has had as much as 13 percent of its assets invested in private mortgage debt underwritten and rated by the bank itself. It has reduced that to just under 4 percent, as of June 30, according to a spokesperson.

Many employers with 401(k) plans were unaware of the private mortgage component of the fund until after the 2008 market crash, according to retirement plan consultants who worked with companies that held the portfolios.

Over the past several weeks, the Labor Department has been examining whether the New York-based bank breached its fiduciary responsibilities under ERISA, according to two people with direct knowledge of the situation who declined to be named because of the sensitivity around discussing potential investigations.

One source, who had been contacted by the Labor Department about the JPMorgan fund, said he did not know if the Labor Department had begun a formal investigation or was still in the exploratory process.

“If it’s not a formal investigation, it’s pretty damn close,” the person said.

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CONFIRMED AT LAST: The attempted cover-up of how JP Morgan torpedoed Lehman Brothers [The Slog]

“And then when you have the suckers by the balls, you squeeze just like this”

Around the time of the Lehman disaster, a senior insider at the firm relayed to me what seemed an astonishing allegation: that in the weeks prior to the eventual collapse, JP Morgan deliberately withheld huge monies owed to Lehman in order to make the bankruptcy a certainty from which they could benefit. I relayed this story to another contact the following year, and he not only corroborated the charge, he also said he was sure Barclays had done the same. The now disgraced Barclays CEO Bob Diamond took over Lehman in a fire sale only weeks later (using taxpayers’ money as a bridging loan to do it) and rapidly built up a commanding position for the division he then headed up, Barcap  – the investment arm of the bank.

Now, more than three years later, regulators have penalised JPMorgan for actions tied to Lehman’s demise. The bank settled the Lehman matter and agreed to pay a fine of approximately $20 million. The action took place because of Morgan’s ‘questionable treatment of [Lehman] customer money’: regulators accused JPMorgan of withholding Lehman customer funds for nearly two weeks. So it had been true after all.

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