AAAAAARGH!!!!!!!!!!!!!! Will they NEVER learn!!?!!?!??!!? Yes folks... the Queen of Meddle returns... BLYTHE MASTERS is appointed Operational Head of Regulatory Affairs for JP Morgan... http://jessescrossroadscafe.blogspot.com.au/2012/09/blythe-masters-appointed-to-head-jpms.html I think I need to go lie down...
So Barney wants to take the heat off JPM eh? http://www.themalaysianinsider.com/...foul-in-governments-lawsuit-against-jpmorgan/ And Jamie Dimon cries foul stating that they 'did The Fed a favour' bailing out Bear Stearns... and the exercise, which they entered into greedily... has cost them $10-20Bn? Bull$hit. Hang on a minute - didn't JPM insist on a loan of $30Bn from The Fed before taking over all those tasty precious metal short contracts and the repackaged sliced & diced toxic bundles of bad debt which were later resold at a profit - much of it picked up again by the American people in the bailouts of Freddie Mac & Fannie Mae? Yes... that's right... Which is another reason why the Evil Empire is addicted to keeping the phys in check - because they know as well as we do that the weaker the US$ gets the less in real terms their ability to keep it together becomes... Here's an MSNBC article from 2008 showing the deal... http://www.msnbc.msn.com/id/23662433/ns/business-us_business/t/jpmorgan-buy-bear-stearns-share/ Wiki: http://en.wikipedia.org/wiki/Bear_Stearns#Fed_bailout_and_sale_to_JPMorgan_Chase $2 a share? I'd buy that for a dollar... if someone could just underwrite the deal for $3/share... please? Anyone?
Wiki: http://en.wikipedia.org/wiki/Bear_Stear rgan_Chase On March 14, 2008, the Federal Reserve Bank of New York agreed to provide a $25 billion loan to Bear Stearns collateralized by free and clear assets from Bear Stearns in order to provide Bear Stearns the liquidity for up to 28 days that the market was refusing to provide. Apparently the Federal Reserve Bank of New York had a change of heart and told Bear Stearns that the 28 day loan was unavailable to them. The deal was then changed to where the NY FED would make a $30 billion loan to J.P. Morgan (collaterallised not by any J.P. Morgan assets but collaterallised by Bear Stearns Assets), who would buy Bear Stearns for 2 dollars per share. How did they get away with this?
Well there's a surprise then... The FDIC have secretly been settling legal cases against their bankster mates 'for years' now we find out... Anyone surprised? Read this - I hope it makes you as angry as it makes me... http://www.huffingtonpost.com/2013/...ss-release_n_2854846.html?utm_hp_ref=business
'Potential' SEC lawsuit against JPM; http://www.bloomberg.com/news/2013-...gives-sec-road-map-for-potential-lawsuit.html My guess is they'll get the usual slap on the wrist and a paltry fine
Like Max Keiser said, they factor in fines into their profit takings just as the mafia factors in bribes to their bottom line. JPM are a powerful criminal clique.
Just a few snipets of quite a long article but worth a read. Could be that there is blood in the water and the other sharks are circling :lol: wouldn't that be ironic. http://www.nakedcapitalism.com/2013...an-chase-as-mostly-a-criminal-enterprise.html Direct link to the article http://www.scribd.com/doc/130290952/Gf-Co-Executive-Summary-JPM-Out-of-Control
Possibly, they're prosecuting Hungarians in Macedonia because the company involved had traded on the NYSE http://anti-corruption-telecoms.blogspot.com.au/2013/02/usa-judge-upholds-right-of-sec-to.html?m=1
headline posted on maxkeiser: JP Morgan Cleared Of Conspiracy "To Drive Down Silver Prices" http://maxkeiser.com/2013/03/19/jp-...iracy-to-drive-down-silver-prices/#more-64417 text: JP Morgan Chase & Co won their case of a nationwide investors' lawsuit accusing them of conspiring to drive down silver prices. U.S. District Judge Robert Patterson in Manhattan said the investors, who bought and sold COMEX silver futures and options contracts, failed to show that JPMorgan manipulated prices, by creating long short positions that were not in synch with market events at the time period. The judge acknowledged that the firm could influence prices, but said that it was not proven that the bank "intended to cause artificial prices to exist" and acted accordingly. The plaintiffs had nearly 43 complaints filed from 2010-2011, which accused banks of profiteering in over $100,000,000 by illegally manipulating silver prices. The lawsuits against major Wall Street firms were consolidated, naming JPMorgan and 20 unnamed individuals as defendants. The complaint had sought triple damages for what it saw as antitrust violations in jiggering silver prices from 2007-2010, including through alleged "fake" trades during low market volumes. The CFTC began investigating queries of silver price manipulation in 2008, and after 2 years it tightened its regulations to foil traders who try to manipulate prices.
http://www.fool.com/investing/gener...-pieces-of-evidence-from-the-jpmorgan-wh.aspx START 7th May 2013 by Ilan Moscovitz & John Reeves The Senate Permanent Subcommittee on Investigations recently produced a 301-page report on JPMorgan Chase's (NYSE: JPM ) "London Whale Trade" fiasco. The Committee's findings should be extremely troubling to investors, politicians, regulators, and concerned citizens alike. Quoting directly from the report, here's what the investigation revealed specifically: Over the first three months of 2012, JPMorgan's Chief Investment Office, used its Synthetic Credit Portfolio (SCP) to engage in high risk derivatives trading; mismarked the SCP book to hide hundreds of millions of dollars of losses; disregarded multiple internal indicators of increasing risk; manipulated models; dodged Office of the Comptroller of the Currency (OCC) oversight; and misinformed investors, regulators, and the public about the nature of its risky derivatives trading. In conclusion, the Subcommittee believes its investigation: ...exposed not only the high risk activities and troubling misconduct at JPMorgan Chase, but also broader, systemic problems related to the valuation, risk analysis, disclosure, and oversight of synthetic credit derivatives held by U.S. financial institutions. This feels like a pretty damning portrayal of a bank whose balance sheet, according to a recent research report, is "almost one-ninth the size of the United States economy." The size of just the Chief Investment Office Portfolio alone -- which was the primary subject of this investigation -- would make it the 7th largest bank in the country. We believe the Subcommittee's painstaking investigation warrants further consideration. Below, we identify some of the most outrageous findings from the report, organized by category. Risk mis-management Because banker compensation is biased toward encouraging risk-taking, banks rely heavily on independent lines of risk officers and their models to keep traders in line. JPMorgan's greatest strength is supposed to be that it has superior risk management to Bank of America (NYSE: BAC) and Citigroup (NYSE: C ) . Here are some risk management failures that caught our attention: 1. From Jan. 1, through April 30, 2012, Chief Investment Office (CIO) risk limits and advisories were breached more than 330 times. 2. JPMorgan's Chief Risk Officer wasn't aware of the risk problems that had already cost the bank $719 million until he read about them in the newspapers. 3. Even though the CIO was a $350 billion unit, bank managers kept giving different answers when the Subcommittee asked who its Chief Risk Officer was in late 2011. It turned out that the position was vacant in late 2011. 4. The CIO risk committee only met three times in 2011 and held its first 2012 meeting at the end of March. According to the JPMorgan Task Force Report: "There was no official membership or charter for the CIO Risk Committee." 5. According to the Subcommittee, "in 2011 and early 2012, risk managers played no role in evaluating and approving trading strategies." 6. In January 2012, the CIO settled on an unusual strategy for reducing its risk-weighted assets. Instead of simply reducing risk by selling their position (which would lose money), traders also began purchasing new, risky positions. The trade lowered how they calculated risk-weighted assets and generated income that (temporarily) covered up losses on their existing position. It's hard to overstate just how dangerous this strategy is. 7. CIO head Ina Drew said she never saw the "Decision Table" that outlined the various trading options for her in January 2012. Later, she conceded she received it as an attachment to an email, but did not focus on it. 8. On Jan. 26, 2012, trader Bruno Iksil (aka The London Whale) prepared a presentation for the CIO's International Senior Management Group advocating a new trading strategy. Iksil proposed, "Go long risk on some belly tranches especially where defaults may realize" and "...turn position over to monetize volatility." Drew admitted to the Subcommittee that the presentation was unclear to her, and she could not explain what it meant. The CIO's Chief Risk Officer at the time also told the Subcommittee that the presentation seemed unclear. The OCC advised the Subcommittee that senior management should have understood the strategy before allowing billions of dollars in trades. 9. The Subcommittee learned that the bank's "risk metrics were intended to act, not as ironclad limits, but as guidelines and red flags." CEO Jamie Dimon admitted "that a breach in a risk 'limit' was intended to lead to a conversation about the situation, not to an automatic freeze or unwinding of positions." 10. But even those conversations apparently didn't happen. "As the CIO's VaR [a key risk metric] continued to climb, the documentation produced to the Subcommittee contains few emails, messages, or telephone calls asking whether the CIO's trading strategy made sense." 11. The CIO responded to risk alarms by ignoring, minimizing, and rewriting their risk models. The head of the CIO's equity and credit trading operation estimated they could get $7 billion -- more than 50% of the total risk-weighted asset reduction they needed -- by simply modifying risk models. 12. It wasn't a violation of bank policy that the analyst who was "rushed" and "under a lot of pressure" to rewrite the VaR model worked for traders instead of risk managers and had no experience creating VaR risk models. 13. The CIO must have been desperate to get its new risk model up and running. Here's what the Subcommittee reports: A critical risk model for a portfolio containing hundreds of billions of dollars of financial instruments, operated by the man who developed the model at the behest of the portfolio manager, included flawed and untested components, and depended upon manual uploads of key trading data daily for its calculations. This untested, unautomated, error prone VaR model was nevertheless put into place at a bank renowned for its risk management. JPMorgan's chief regulator, the Office of the Comptroller of the Currency (OCC), later called the implementation efforts "shocking" and "absolutely unacceptable." JPMorgan's current acting Chief Risk Officer agreed. 14. Overnight, the new VaR model artificially lowered calculated risk by 50%. 15. Another risk model indicated losses could total $6.3 billion -- it proved correct. But at the time, a key CIO risk manager dismissed the figure as "garbage." 16. A separate group of key risk limit breaches grew to some 270% the allowable amounts by February. Drew agreed to increase the limit: "I have no memory of this limit. In any case it needs to be recast with other limits. It's old and outdated." 17. By April 17, 2012, a JPMorgan Chase close of business email notification stated that limit had been breached by 1,074% for 71 days. 18. The CIO didn't have any limits requiring basic diversification. The Subcommittee found that "Concentration limits are such a well-known, fundamental risk tool, that their absence at the CIO is one more inexplicable risk failure." 19. The OCC told the Subcommittee that after reviewing the portfolio's activities, it was clear that the CIO traders had made trades that violated the CIO's risk limits with "aggressive positions" in a way that was "unsafe and unsound." Also, OCC said the credit trades were "risk additive" rather than "risk reducing." 20. JPMorgan finally revoked the flawed VaR model in May 2012, after the London Whale scandal broke. But just four months later it revised the model again, lowering JPMorgan's overall VaR by 20%. Mismarking the books In early 2012, as the CIO began experiencing a sustained series of daily losses in its Synthetic Credit Portfolio (SCP), it suddenly began to change how it valued its positions. Traders began referring to the difference between the prices reported internally and the actual mid-point prices as "lag." The evidence below suggests a somewhat "creative" approach to security valuation. 21. On a March 9, 2012, phone call with Bruno Iksil, fellow trader Julien Grout expressed concern about how "we're lagging," predicting that the final outcome of the trading strategy would be "a big fiasco" and "big drama when, in fact, everybody should have ... seen it coming a long time ago." He cautioned: "We have until December to cover this thing. ... We must be careful." 22. By March 16, 2012, Iksil made it clear that he was using more favorable valuations for his positions. In a telephone conversation with Grout, he said: I can't keep this going...I think what he's [their supervisor, Javier Martin-Artajo] expecting is a remarking at the end of the month...I don't know where he wants to stop, but it's getting idiotic... Now it's worse than before...there's nothing that can be done, absolutely, nothing can be done, there's no hope...The book continues to grow, more and more monstrous. 23. On March 23, Iksil estimated in an email that the SCP had lost $600 million using midpoint prices, but only $300 million using "best" prices. The SCP ended up reporting a $12 million loss that day. 24. For five days in March, a trader kept a spreadsheet tracking the difference between how much money traders reported they had lost using favorable valuations, and how much they would have reported had they been using normal, mid-point valuations. The conclusion: They had reported year-to-date losses of $161 million, but there was an additional $432 million that would have been reported had they been using mid-point prices. Drew said she never saw that "shadow P&L" document. 25. At the end of the first trading day after media reports on April 6, 2012, traders responsible for reporting were told to "let the losses flow." 26. An email to Drew estimated that second-quarter losses wouldn't exceed $200 million, assuming they "exclude[d] very adverse marks." 27. A week later, Drew told traders to "Start getting a little bit of that mark back... so, you know, an extra basis point you can tweak at whatever it is I'm trying to show." She later explained to the Subcommittee that traders told her they were making "conservative" marks and she wanted them to be more "aggressive." 28. JPMorgan's Controller later conducted a special investigation into the mismarking. "The Controller validated the CIO's quarter-end credit derivative marks as 'consistent with industry practices' and acceptable under bank policy, and offered no criticism of its valuation practices." Thwarting regulators Our colleague Morgan Housel recently wrote, "Companies that have antagonistic relationships with their regulators probably want to engage in behavior that won't benefit their long-term shareholders. Bear Stearns and Lehman Brothers fought hard for permission to use more leverage. It killed them." Here's how JPMorgan thwarted its main regulator, the Office of the Comptroller of the Currency (OCC): 29. The report found that "Prior to media reports of the whale trades in April 2012, JPMorgan provided almost no information about the CIO's Synthetic Credit Portfolio to its primary regulator, the OCC." 30. In December 2010, the OCC sent a Supervisory letter to Ina Drew informing her that "risk management framework for the investment portfolios" lacked "a documented methodology" and "clear records of decisions" and requiring CIO management to "document investment policies and portfolio decisions." Drew "sternly" criticized the OCC for 45 minutes for being overly intrusive. She complained the regulator was trying to "destroy" JPMorgan by taking away necessary flexibility, and said that Jamie Dimon was fully aware of their investment decisions. 31. According to the OCC examiner-in-charge at JPMorgan, it was "very common" for the bank to resist OCC findings and recommendations. One time bank executives yelled at OCC examiners and called them "stupid." Another time, the most junior-level OCC examiner arrived for a one-on-one meeting and was "ambushed" by the heads of all JPMorgan Risk Divisions. 32. In January 2012, the CIO seems to have misled the OCC by saying it planned to reduce the Synthetic Credit Portfolio. Instead, it tripled the notional size of the SCP from $51 billion to $157 billion over the course of the quarter. 33. As losses grew from January through April 2012, the bank began providing the OCC less and less data. 34. Dimon ordered the bank to omit critical CIO performance data from its standard reports to the OCC. No one told the OCC why the data was halted. Dimon later explained to the Subcommittee that he didn't feel the OCC needed the data. 35. Dimon "raised his voice in anger" at CFO Douglas Braunstein for agreeing to resume sending the OCC the reports. 36. When the OCC found out about the whale trade in the newspapers and requested more information, the CIO gave them incomplete tables that the OCC called "useless" and "absolutely unhelpful." 37. According to the Subcommittee, "For ten days, from April 9 to April 19, the bank repeatedly assured the OCC that the CIO whale trades were nothing to worry about." It told the OCC the whale trades helped manage bank risk and gave different excuses for breaking risk limits. Then, "for nearly three weeks, the bank did not call, email, or otherwise update the OCC about any aspect of the SCP's worsening status." By that point, losses had reached $1.6 billion. Speculation According to a yet-to-be-implemented piece of the 2010 financial reform legislation known as the "Volcker Rule," banks are supposed to be prohibited from speculating with their funds. While banks have managed to delay the rule's implementation, in the meantime, they've been keen to present themselves to investors, regulators, and the public as out of the speculation business. Although banks will be able to continue placing hedging trades to help manage risk -- and that's what JPM asserted it was doing -- that doesn't appear to be what happened here. 38. The original derivatives positions came from a discontinued unit called "Proprietary Positions Book," and the portfolio used to be part of something called the "Discretionary Trading Book" that was renamed the "Tactical Asset Allocation Portfolio" -- jargon that suggests speculation. 39. The SCP was supposedly created with a hedging function, but the bank was unable to provide documentation over the next five years detailing SCP's hedging objectives and strategies; the assets, portfolio, risks, or tail events it was supposed to hedge. One OCC examiner referred to it as the "make believe voodoo magic 'composite hedge.'" Even Dimon acknowledged that the portfolio "morphed into something that rather than protect the firm, created new and potentially larger risks." 40. JPMorgan representatives admitted to the Subcommittee that calculating the size and nature of the hedge was "not that scientific" and "not linear." According to Drew, it was a "guesstimate." 41. Compensation history for SCP traders shows that the bank rewarded them for financial gain and risk-taking more than for effective risk management. 42. In late 2011, the SCP bankrolled a $1 billion bet that produced a gain of $400 million. This was known as the caveman trade. Iksil said the gains were massive -- and the company called them "windfall gains." The OCC would later characterize the trade as "pretty risky" and completely dependent on timing. Drew responded by telling her traders to try and repeat their performance the following year. 43. In 2011, the SCP net notional size jumped from $4 billion to $51 billion, a more than tenfold increase. In the first quarter of 2012, the net notional size increased to $157 billion. By end of March 2012, the SCP held more than 100 different credit derivative instruments -- JPM personnel described it as "huge" and of "perilous size." Investor communication Once the London Whale trades became public, JPMorgan's executives worked to reassure investors, markets, and the public that the whale trades were a hedge (as opposed to speculation) and that the bank had things under control. The Subcommittee was skeptical of how truthful JPMorgan's management has been with investors and the public. 44. During JPMorgan's April 13 earnings call and its May 10 "business update" call, CEO Jamie Dimon and CFO Douglas Braunstein reassured investors and the public that the portfolio was a long-term hedge for helping the bank manage risk. According to the report, the two executives struggled to explain to the Subcommittee why they believed the portfolio functioned as a hedge. 45. On April 13, Braunstein also told investors that the bank believed its SCP trades were consistent with the approaching ban on bank speculation. The bank was unable to provide the Subcommittee with any legal analysis supporting that claim. In fact, the bank's official public comment letter to regulators said just the opposite of what the bank told investors. 46. Braunstein reassured investors that "all of these positions are put on pursuant to risk management at the firmwide level." According to the Subcommittee, "virtually no evidence indicates that he, his predecessor, or any other firmwide risk manager played a role in designing, analyzing, or approving the ... positions acquired in 2012." In fact, JPMorgan's Chief Risk Officer didn't find out about the SCP's problems until they were reported in the press. Braunstein also didn't mention that the CIO had blown through its risk limits. 47. Braunstein also told investors, "All of those positions are fully transparent to the regulators. They review them, have access to them at any point in time, get the information on those positions on a regular and recurring basis as part of our normalized reporting." According to the Subcommittee, "This statement by Mr. Braunstein has no basis in fact." The OCC thought the bank was phasing out the SCP portfolio and wouldn't even be told about its losses for another three weeks. 48. The Subcommittee points out that in an April 13 public filing with the SEC, JPMorgan indicated to investors that the CIO's risk had slightly declined, even though the SCP portfolio was three times larger, had riskier assets, and the bank had replaced its previous risk model with a new one that dramatically lowered how risk was calculated. On July 13, 2012, the bank restated its first-quarter earnings, reporting additional SCP losses of $660 million. It struggled with that, thinking the loss wasn't "material." What's the big deal? Some observers might be tempted to dismiss the "Whale Trade" fiasco as a relatively minor mistake at an enormously complex financial institution -- a "tempest in a teapot" if you will. The overall losses were at least $6.2 billion -- a very manageable amount for JPMorgan, which had shareholder equity of $184 billion on its balance sheet at the end of 2011. The problem, of course, is that a future loss might be considerably larger. Just recently, JPMorgan itself examined the effects of a "hypothetical" loss of $50 billion. That exercise showed that the bank would fail in that scenario. So ultimately, we all must ask: What is the likelihood that JPMorgan might suffer a loss that could put its survival -- and the stability of the entire financial system -- at grave risk? We believe the evidence presented above suggests that likelihood is much higher than it should be. What do you think? END
For decades JP Morgan has secretly taken out life insurance policies on its employees - from the boardroom - to the janitors in their bathrooms... Gambling on high-risk synthetic credit derivatives is not the only area of interest at JPMorgan's Chief Investment Office (CIO) the division that has thus far admitted to losing $6.2 billion in the London Whale debacle. According to Exhibit 81 released by the U.S. Senate's Permanent Subcommittee on Investigations, Ina Drew, the head of the CIO, was also overseeing the investment of funds in the firm's Bank Owned Life Insurance (BOLI) and Corporate Owned Life Insurance (COLI) plans a scheme enshrined by the U.S. Congress in 2006 that allows too-big-to-fail banks as well as many other corporations to reap huge tax benefits by taking out life insurance policies on workers even low wage workers and naming the corporation the beneficiary of the death benefit. Most Americans are unaware that for at least 25 years big business and banks have been secretly taking out millions of life insurance policies on their workers and naming the corporation the beneficiary of the death benefit without the knowledge of the employee. The individual policies are frequently in the hundreds of thousands of dollars and sometimes millions. To keep track of employees who have left the company, deaths are routinely tracked through the Social Security Administration. The policies became known as "dead peasant" or "janitor" policies because corporations took out life insurance on millions of low-wage workers, including janitors, without their knowledge or consent. The insurance can give a nice boost to bottom-line corporate profits because it provides multiple tax breaks, including: the cash buildup in the policy is reported as income but is tax-exempt because it resides in a tax-sheltered life insurance policy; the cash payment the company receives when the employee dies is also tax-free under existing tax law. In 2003, the General Accountability Office (GAO) released a study which found that multiple companies held policies on the same individual and that 3,209 banks and thrifts had current cash values in these policies totaling $56.3 billion. In 2006, Congress passed the Pension Protection Act. Instead of outlawing this dubious practice, Congress grandfathered all of the millions of previously issued policies while imposing a few tax and reporting rules. A study by Susan Lorde Martin, Professor of Business Law at Hofstra University in Uniondale, New York found that Portland General, at the time a subsidiary of Enron, had created a COLI arrangement where the death of low-wage workers was funding lavish compensation plans for top executives: "About 75% of an estimated $80 million in benefits from the policies pays for a long-term compensation plan for managers, directors, and other top officers; the other twenty-five percent contributes to a supplemental executive retirement plan. Workers who have had their entire retirement funds of hundreds of thousands of dollars wiped out by Enron's collapse were shocked to discover that their deaths will support benefit plans for top Enron executives." http://dailybail.com/home/profiting-on-the-death-of-employees-the-jpmorgan-way.html
Upped their litigation reserves to $1.5bn Might need a bit more if going on the past. "Joshua Rosner, a financial analyst and co-author of Reckless Endangerment, in March estimated that the company's litigation expenses since 2009 have totaled $16 billion." "The New York Times reported that at least eight federal agencies are currently investigating the bank."
TOO BIG TO JAIL... JP Morgan settles criminal charges with a $2.6 BILLION payout (of which $1.7 BILLION goes to the legal teams handling the settlement) over the Bernie Madoff Affair But why isn't anyone jailed? CNN discusses why no jail for Jamie & his teams who routinely bend regulations and flout the law... [youtube]http://www.youtube.com/watch?v=LHt2mxRftnU[/youtube]
