Best of the Week
Most Popular
1.Stock Market in DANGER of Strangling the Bears to Death - Nadeem_Walayat
2. Germany Pivoting East, Exit US Dollar, Enter Gold Standard - Jim_Willie_CB
3.Flight MH17 – Kiev Flash Mob's Last False Flag? - Andrew_McKillop
4.Stock Market Crash Nightmare! - Nadeem_Walayat
5.Gold - The Million DOLLAR Question... - Rambus_Chartology
6.Gold And Silver – BRICS And Germany Will Pave The Way - Michael_Noonan
7.The Jewish Selfish Gene, People Chosen by God, Everyone Else is Goyim to Kill - Nadeem_Walayat
8.The Israeli Promised Land Dream - The Criminal Roadmap Towards “Greater Israel”? - Felicity Arbuthnot
9.Which Way is Inflation Blowing? Watch Commodities - Gary_Dorsch
10.U.S. Economy Quarterly Review and Implications for 2014-2015 - Lacy Hunt
Last 5 days
HUI Gold Bugs Fighting To Break Downtrend - 23rd July 14
What Putin Knows About Flight MH17 - 23rd July 14
Why Microsoft Will Continue to Rebound, Huge Upside Potential - 23rd July 14
Will Putin Survive? - 23rd July 14
MH17 Crash Next Phase Economic Warfare - 22nd July 14
The TRUTH about China’s Massive Gold Hoard - 22nd July 14
Forex Multi-week Consolidation in EUR/USD Ended - 22nd July 14
Bitcoin Price Medium-term Trend Being Tested - 22nd July 14
Beware Of The Flash Mob - 22nd July 14
Can Putin Survive? - 22nd July 14
Israel Assault on Gaza: A Historic Crime, Nazi Like Final Solution - 22nd July 14
Zionist Israel an International Pariah - 22nd July 14
Reflections on the Global Misery Index - 22nd July 14
GDP Economic Statistic : A Brief But Affectionate History - 22nd July 14
TransTech Digest: Super Battery Bio-Power vs. Dirty CleanTech - 21st July 14
How to Find Trading Opportunities in the Currency Markets - 21st July 14
Stock Market One More Pull Back - 21st July 14
The Conquest Of Real - Degenerate Philosophies of the Book - 21st July 14
A Clear Way to Profit from a Graying Population - 21st July 14
Last Chance Critical Financial Market Forecasts Special Total Access - 21st July 14
Stock Market Crash Nightmare! - 21st July 14
Why the Stock Market Is STILL Cheap - 21st July 14
From Gore-Bore To Gore-War - 21st July 14
Gold Price Looking Drab - 21st July 14
An In-Depth Look at Gold Chartology - 21st July 14
The Jewish Selfish Gene, People Chosen by God, Everyone Else is Goyim to Kill - 20th July 14
AUD NZD Taking The Forex Bull By The Horns - 20th July 14
US-backed Israeli Invasion of Gaza Unleashes Death and Destruction - 20th July 14
The Israeli Promised Land Dream - The Criminal Roadmap Towards “Greater Israel”? - 20th July 14
Stock Market in DANGER of Strangling the Bears to Death - 20th July 14
Sanctions and Airliners - What’s the U.S. Empire’s Agenda? - 19th July 14
Gold And Silver – BRICS And Germany Will Pave The Way - 19th July 14
Choppy Stock Market in Recent Weeks - 19th July 14
Is The Stocks Bull Market Over? - 19th July 14
Edward Snowden Towers Over His Enemies - 19th July 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

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