By Pam Martens: July 6, 2012
JPMorgan Chase Share Price This Past Week
A five day chart of JPMorgan Chase shows what shareholders think of the company. (The market was closed Wednesday for the July 4th holiday.) Taxpayers have no reason to cheer either. Each day seems to bring another tax-payer funded investigation of potentially serious wrongdoing at the firm.
The latest probe involves an investigation into JPMorgan for manipulating electric markets in California and the Midwest through its commodities business. The Federal Energy Regulatory Commission (FERC) issued subpoenas to JPMorgan in April and May. FERC wanted emails pertaining to its investigation. JPMorgan is now being sued by FERC in Federal Court in Washington, D.C. to turn over 25 emails it has withheld.
The dispute has erupted into the public spotlight over the incredulous claim by JPMorgan that the emails are subject to attorney-client privilege. FERC says the emails are between bankers. How JPMorgan hopes to convince a Federal court that interoffice communications between commodities traders or bankers are off limits from a regulator will be interesting to watch. The court has told the firm to file its explanation by July 13. That’s the same date that Jamie Dimon, Chairman and CEO of JPMorgan, will be announcing the firm’s second quarter earnings, or lack thereof, along with the announcement of billions of losses taken to date from the derivatives’ blowup in its Chief Investment Office (CIO). Insured deposits at the banking side of JPMorgan Chase were used to make the high stake gambles in derivatives. That fact has spawned three Congressional hearings to date.
The CIO losses are under investigation by the Department of Justice, FBI, SEC, Office of the Comptroller of the Currency, Federal Reserve, Commodities Futures Trading Commission and FDIC.
JPMorgan is also one of the global banks under intense investigation by United States and global investigators for potential collusion in rigging the London Interbank Offered Rate, known as LIBOR. That rate impacts millions of mortgages and financial products offered around the world that are indexed to LIBOR. Emails from inside Barclays, which is the first bank to settle its claims with regulators for $453 million, show a culture steeped in bid-rigging with a wink and a nod.
Market veterans believe the JPMorgan emails must be incendiary for it to raise the ire of its regulator by denying it access on the specious argument that the emails are covered by attorney-client privilege.
