Best of the Week
Most Popular
1.Putin’s World: Why Russia’s Showdown with the West Will Worsen - John_Mauldin
2. Stocks Bull Market Grinds Bears into Dust, Is Santa Rally Sustainable? - Nadeem_Walayat
3. Gold and Silver 2015 Trend Forecasts, Prices to Go BOOM - Austin_Galt
4.Gold Price Golden Bottom? - Toby_Connor
5.Gold Price and Miners Soar on Huge Volume - P_Radomski_CFA
6.Stock Market and the Jaws of Life or Death? - Rambus_Chartology
7.Gold Price 2015 - EWI
8.Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome - Nadeem_Walayat
9.Gold, Silver, Crude and S&P Ending Wedge Patterns - DeviantInvestor
10.Is the Gold And Silver Golden Rule Broken? - Michael_Noonan
Last 5 days
The Price Of Oil Exposes The True State Of The Economy - 27th Nov 14
Brazilian Bovespa Stock Market Technical Analysis - 27th Nov 14
Gold Price Would Soar on Possible Swiss Yes Vote - 27th Nov 14
Crude Oil Asset Bubble Trouble - 27th Nov 14
Thanksgiving and Puritan Geopolitics in the Americas - 27th Nov 14
The Dow Jones Stocks Index - Beautiful Tree in the Desert - 27th Nov 14
The Digital World, The Opiate of The People - 27th Nov 14
Harry Dent's Simple Strategy for Surviving Withdrawals from Markets on Crack - 27th Nov 14
Socialist France Just Cannot Compete Against Google Freedom - 27th Nov 14
A Short Tale About the Grand Manipulation of Crude Oil Prices - 26th Nov 14
China Secret Gold Buying ... How Could It Happen? - 26th Nov 14
Gold Price Spikes to $1,467.50/oz on Computer Glitch? - 26th Nov 14
Gold - So Bad It's Good: Surviving 2014 - 26th Nov 14
TrueShopping.co.uk Real Customer Experience Review - Online Shopping Lessons - 26th Nov 14
Is There A New Global Consensus About Cheating Investors To Reboot Employment? - 26th Nov 14
EUR/USD – Currency Bulls Don’t Give Up - 26th Nov 14
Swiss Gold Referendum A Golden Opportunity for Switzerland - 25th Nov 14
Silver: What COT Analysis Tells Us - 25th Nov 14
Stock Market Big, Bold and Ugly - 25th Nov 14
U.S. Dollar Near Top? Gold and Silver Trading, Platinum Breakout Invalidation - 25th Nov 14
Buy Fear - Easily Pick Up Profits on Stock Market Dips - 25th Nov 14
The Islamic State Reshapes the Middle East - 25th Nov 14
Gold Price Forecast 2015 - 25th Nov 14
The Swiss Referendum On Gold: What’s Missing From The Debate - 25th Nov 14
Clash of Generations - Why Millennials Still Live at Home; Not Jobs, Student Debt, or Housing - 25th Nov 14
Stock Market Reminiscent of Pompeii - 25th Nov 14
Once Upon A Time There Were Philosopher Kings - 24th Nov 14
The 2014 Crude Oil Price Crash Explained - 24th Nov 14
China Stock Investing - Follow the Money! - 24th Nov 14
122 Tonnes of Gold Secretly Repatriated to Netherlands - 24th Nov 14
What Causes the U.S. Dollar to Move? - 24th Nov 14
Stock Market Indexes New Highs - Will Uptrend Extend Even Further? - 24th Nov 14
All Hail the King U.S. Dollar - Trend Forecast - 24th Nov 14
Where Is China Economy On The Map Exactly? - 24th Nov 14
Most of The World Economies Panic - Is The US Next? - 24th Nov 14
Stock Market Exhaustion Gap? - 24th Nov 14
Gold Golden Gains Come After The Pain - 24th Nov 14
Crude Oil and Stock Market Setting The Stage For The Next Recession - 23rd Nov 14
This Publicly-Owned Bank Is Outperforming Wall Street - 23rd Nov 14
Who’s Ready For $30 Crude Oil Price? - 23rd Nov 14
Strategic, Methodological and Developmental Importance of Knowledge Consumption - 23rd Nov 14
Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome - 23rd Nov 14
Gold Price 2015 - 22nd Nov 14
Stock Market Medium Term Top? - 22nd Nov 14
Is the Gold And Silver Golden Rule Broken? - 22nd Nov 14
Malaysia's Subsidy and Budget Deficit Conundrum - 22nd Nov 14
Investors Hated Gold at Precisely the Wrong Time: What About Now? - 22nd Nov 14
Gold and GLD ETF Selloff - 22nd Nov 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Gold Report 2015

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

© 2005-2014 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

Free Report - Financial Markets 2014