Best of the Week
Most Popular
1.Election Forecast 2015 - Opinion Polls Trending Towards Conservative Outright Win - Nadeem_Walayat
2.UK Solar Eclipse - End Time Sign, Judgement Day, Doomsday! - Nadeem_Walayat
3.Gold And Silver - When Will Precious Metals Rally? Not In 2015 - Michael_Noonan
4.Preparing for the Next Stocks Bear Market - Forecast 2015-2016 - Gary_Savage
5.Is a Stock Market Crash Imminent? - David Eifrig
6.Gold Price Slumps as US Dollar Soars, What's Next? - Nadeem_Walayat
7.US Dollar Forex Pairs and Gold Chartology - Rambus_Chartology
8.Election Forecast 2015: The Day Labour Lost the General Election - Nadeem_Walayat
9.The ECB Should End QE Next Month - EconMatters
10.Silver Price Poised to Surge - Zeal_LLC
Last 5 days
Don’t Celebrate the U.S. Housing Market Recovery Yet - 30th Mar 15
A Middle East Nuclear Holocaust - 30th Mar 15
Peak Gold? – Goldman Sachs Research Warns of Peak Gold Production - 30th Mar 15
With Yemen Burning, Arab Spring II Is Underway - 30th Mar 15
No FED Bets From the BIS - 30th Mar 15
Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - 30th Mar 15
Economic Recovery, Geopolitics and Detergents - 30th Mar 15
U.S. Dollar, Commodities and the Gold Miners GDXJ ETF Analysis - 30th Mar 15
Stock Market Short-term Downtrend - 30th Mar 15
David Cameron Election 2015 Debate Facts Check - Employment, Immigration, Debt & Deficit - 29th Mar 15
Stock Market About Ready to Crash! - 29th Mar 15
Reflections in a Golden Eye - Gold Market Rejection, Repatriation and Redemption - 28th Mar 15
Stock Market Inflection Point - 28th Mar 15
Gold And Silver - What Moved Price? Bab el-Mandeb And Uranus Square Pluto. What?! - 28th Mar 15
Stock Market Investment Parachutes; Do You Have Yours? - 28th Mar 15
Peak Gold Misunderstanding, is Gold About to Run Out? - 28th Mar 15
Deflation Watch: Key U.S. Economic Measures Turn South - 27th Mar 15
The Hard-Earned Truth About Recreational Real Estate - 27th Mar 15
Bitcoin Price Still in Important Territory - 27th Mar 15
Stocks Bear Market Conditions - Index Market Range Warning - 27th Mar 15
BEA Leaves Q4 2014 U.S. GDP Growth Essentially Unchanged at 2.22% - 27th Mar 15
Brazil Economy Victim of Vulgar Keynesianism - 27th Mar 15
Gold to Fuel Silver Price Upleg - 27th Mar 15
Gold and Silver Stocks Will Rise Again! - 27th Mar 15
Risk of ‘World War’ between NATO and Russia on Ukraine as Yemen Bombed - 27th Mar 15
FOMC Minutes Turned The Gold Tide - 27th Mar 15
Sheffield Hallam Election Battle 2015 - Lib Dems Go to War Whilst Labour Sleeps - 27th Mar 15
Gold Effect On Mining & Shale Wasteland - 27th Mar 15
How Stock Investors Should Play the 2016 Presidential Race - 26th Mar 15
MidEast Energy Alert: Why the Crisis in Yemen Could Get Ugly Very Fast - 26th Mar 15
Stock Market Downward Spiral of Dumbness - 26th Mar 15
The Monetary Approach Reigns Supreme - 26th Mar 15
Stock Market Large Gap Down, Despite the Algos' Push Back - 26th Mar 15
Crude Oil Surges, Gold price Spikes as Middle East Tensions Escalate - 26th Mar 15
The U.S. Housing Market Recovery Is Fabricated Optimism - 26th Mar 15
Why Yemen Is The Next Saudi-Iranian Battleground - 26th Mar 15
The Crude Oil Price Crash and China Economic Slow Down - 26th Mar 15
Global Financial Markets Are More Distorted Than Ever Before - 26th Mar 15
One More Stock Market Rally and Then a Huge Drop Expected - 26th Mar 15
Danger Will Robinson - Stock Market Crash Warning - 25th Mar 15
Learn the Basics of Corrective Elliott Waves - 25th Mar 15
Why CNBC Is Hazardous to Your Financial Health! - 25th Mar 15
Will Your Retirement Accounts Survive The Coming Tax Code "Revolution"? - 25th Mar 15
US Dollar - Americas Phoenix - 25th Mar 15
California’s Epic Drought: Only One Year of Water Left! - 25th Mar 15
What’s Wrong With Silver? - 25th Mar 15
SPX Futures Appear Weak. WTIC and Gold May Be at Max Retracement - 25th Mar 15
We’re at the Dawn of a “New Energy Age” - 25th Mar 15
A Very Weak U.S. Economic Recovery - 25th Mar 15
Zero UK CPI Inflation Rate Prompts Deflation Danger Propaganda For Fresh Money Printing - 25th Mar 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Economy Still on Life Support

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

© 2005-2015 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