Best of the Week
Most Popular
1.Gold Price Trend Forecast, Where are the Gold Traders? - Bob_Loukas
2.Stocks Bear Market of 2017 Begins? Shorting the Dow At its Peak! - Nadeem_Walayat
3.Betting on President Trump Leaving Office Early, Presidency End Date - Betfair Market - Nadeem_Walayat
4.Why Stock Market Analysts Will be Wrong About 2017 - Clif_Droke
5.Is This The Best Way For Investors To Play The Electric Car Boom - OilPrice_Com
6.Silver Price 2017 Trend Forecast Update - Video - Nadeem_Walayat
7.Gold Price Set For Very Bullish 2017, Trend Forecast - Austin_Galt
8.10 Things I learned From Meetings With Trump’s Transition Team - - John_Mauldin
9.How Investors Can Profit From Trumps Military Ambitions - OilPrice_Com
10.Channel 4 War on 'Fake News', Forgets Own Alt Reality Propaganda Broadcasting - Nadeem_Walayat
Last 7 days
Brent Crude Oil Price Technical Update: Low Volatility Leads to High Volatility - 20th Feb 17
Trump’s Tax System Could Spark The Wave Of Self-Employment - 20th Feb 17
Here’s How to Stay Ahead of Machines and AI - 20th Feb 17
Warning Signs Of Instability In Russia - 20th Feb 17
Warning: This Energy Investment Could Wreak Havoc On Your Portfolio - 20th Feb 17
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts - 19th Feb 17
Gold’s Fundamentals Strengthen - 18th Feb 17
The Flynn Fiascom, the Trump Revolution Ends in a Whimper - 18th Feb 17
Not Nearly Enough Economic Growth To Keep Growing - 18th Feb 17
SPX Stocks Bull Market Continues to make New Highs - 18th Feb 17
China Disaster to Trigger Gold Run, Trump to Appoint 5 of 7 Fed Governors - 18th Feb 17
Gold Stock Volume Divergence - 17th Feb 17
Gold, Silver, US Dollar Cycles - 17th Feb 17
Inflation Spikes in 2017, Supporting Gold Prices Despite Increased Odds of March Rate Hike - 17th Feb 17
Roses Are Red... and So's Been EURUSD's Trend - 17th Feb 17
Gold Trade Note Sighted - 17th Feb 17
Gold Is Undervalued Say Leading Fund Managers - 17th Feb 17
NSA, CIA, FBI, Media Establishment 'Deep State' War Against Emerging 'Trump State' - 16th Feb 17
Silver, Gold Stocks and Remembering the Genius of Hunter S. Thompson - 16th Feb 17
Maps That Show The US’ Strategy In Asia-Pacific - 15th Feb 17
The Trump Stock Market Rally Is Just Getting Started! - 15th Feb 17
Tesco Crisis - Fake Prices, Brexit Inflation Tsunami to Send Food Prices Soaring 10% 2017 - 15th Feb 17
Stock Market Indexes Appear Ready to Roll Over - 15th Feb 17
Gold Bull Market? Or was 2016 Just a Gold Bug Mirage? - 15th Feb 17
Here’s How Germany Buys Time From China - 15th Feb 17
The Stock Trader’s Actionable Guide to Trump - 15th Feb 17
Trump A New Jacksonian Era? The Fourth Turning (2) - 14th Feb 17
Stock Market Yet Another Wall Street 'Witch's Brew' - 14th Feb 17
This Is Why You Don’t Own A Lot Of Stocks - 14th Feb 17
Proposed Tax Reforms Face Enormous Headwinds - 14th Feb 17
BBC Inside Out Tesco Rip off Offers - Determined to Lose Big Spend Customers! - 13th Feb 17
Is the UK An Economy Built on Debt? - 13th Feb 17
Stock Market VIX Cycles set to Explode in March/April 2017 – Part 2 - 13th Feb 17
Stocks At Record Highs - Will Uptrend Accelerate? - 13th Feb 17
US Dollar: 'Rumors of My Death are Greatly Exaggerated' - 13th Feb 17
Is This The Top Commodity Play For 2017? - 13th Feb 17
Trump a New Jacksonian Era? - 13th Feb 17
Stock Market at High Tide - 13th Feb 17
Channel 4 War on 'Fake News' Ends - The New News Age - 12th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

Financial Scandals That Made JPMorgan Wall Street's Worst Villain

Companies / Banksters May 07, 2013 - 12:58 PM GMT

By: Money_Morning

Companies

David Zeiler writes: Wall Street's Big Banks are hardly known for their good deeds, but JPMorgan Chase (NYSE: JPM) may be the worst of the lot.

For a bank that used to be considered a model citizen among Wall Street institutions, the reversal of reputation has been stunning.


According to The New York Times, at least eight federal agencies are currently investigating JPM. And JPMorgan has more regulatory sanctions against it than any other major U.S. bank.

The damage to JPMorgan's reputation has gotten so bad that it has started to negatively affect the nation's largest bank by assets.

Increased regulatory scrutiny brought on by the scandals has slowed or halted about 60 new projects in JPMorgan's consumer unit, for example. The turmoil also has touched off a series of high-profile departures from the bank.

It also hasn't helped that JPMorgan CEO Jamie Dimon has at times been combative with regulators and unfazed about the significance of the problems.

"It's the tone-deafness of comments like Dimon's "tempest in a teapot' remark that is staggering," Cornelius Hurley of Boston University's Center for Finance, Law & Policy told Forbes. Dimon made that remark early on in the infamous "London Whale" scandal, when the huge losses were started to mount.

While JPM has so far maintained strong earnings despite the storm of scandals, sooner or later these problems will start to eat into the bottom line.

While not an exhaustive list, here are the latest developments in the five worst JPMorgan scandals of the last few years:

The Five Biggest Scandals at JPMorgan Chase (NYSE: JPM)

  • Energy Scandal: JPMorgan is now under scrutiny for an energy trading business it acquired in the 2008 takeover of Bear Stearns, in which the bank gained the rights to sell electricity from power plants in Michigan and California. At first derided as "an unprofitable asset," government investigators say JPMorgan traders in Houston came up with eight different "manipulative schemes" to offer electricity to California and Michigan at prices "calculated to falsely appear attractive." The strategy - which reminds some of the Enron debacle -- generated $83 million in "excessive" payments, Federal Energy Regulatory Commission (FERC) investigators said. The FERC report also said a top JPM executive, Blythe Masters, made "scores of false and misleading statements and material omissions" to authorities. JPMorgan has until at least mid-May to respond, but likely faces large fines.
  • The London Whale: It's already been a year since the news broke that a JPMorgan trader in London made several oversized bets in the credit default swaps markets that went bad to the tune of $6.2 billion. A recent Congressional investigation ticked off a litany of transgressions: traders manipulated portfolio values to hide losses; breached risk limits; manipulated measures of risk; and dodged regulators.
  • Enabling Madoff: While JPMorgan Chase served as Bernie Madoff's primary bank for over two decades, it never noticed anything worth reporting to regulators. Or so it says. The Office of the Comptroller of the Currency disagrees, saying last month that JPM failed to conduct adequate due diligence and report suspicious activity. That makes JPMorgan at least partly responsible for the $17.3 billion in investor money that was lost in the elaborate Ponzi scheme.
  • LIBOR Scandal: JPM is among the many large financial institutions implicated in the LIBOR manipulation scandal, a key interest rate used in derivatives markets. The banks allegedly rigged the rates for profit, while costing other markets that use the rates - such as mortgage companies - billions. JPMorgan is one of banks Freddie Mac is suing over the LIBOR scandal.
  • Credit Card Scandals: Last year JPMorgan agreed to pay $100 million to credit card customers who said in class-action lawsuit that the bank had increased their minimum payments to generate more fee income. Incredibly, that didn't deter JPM from using other shady ways to milk profits from its credit card customers. The OCC is currently investigating allegations that JPMorgan employed faulty practices while trying to collect credit card debt. Complaints include the robo-signing of documents to obtain legal judgments and faulty records that showed customers owing more than they actually did.

If you're still not convinced that JPMorgan is setting new lows for bad behavior, then you must not have read this yet: Why JPMorgan Wants to See More Americans on Food Stamps.

Source :http://moneymorning.com/2013/05/06/five-scandals-that-made-jpmorgan-wall-streets-worst-villain/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife