Search Results for: Jamie Dimon

ABACUS, London Whale: Frenchmen Take the Fall for Wall Street’s Crimes

By Pam Martens: August 13, 2013  Qu’est-ce que c’est? Frenchmen?  In the quintessentially American male testosterone epicenter known as Wall Street, Frenchmen are dropping like flies. Not so much the American CEOs in Wall Street’s corner offices. The only handcuffs these guys are seeing are the golden ones.  Fabrice Tourre, the 34-year old Goldman Sachs salesman from an elite educational background in France, was found guilty of six counts of securities fraud in a Manhattan jury trial that ended 12 days ago. The case was a civil suit brought by the Securities and Exchange Commission. One of those counts was for “aiding and abetting” Goldman Sachs in the fraud. Goldman Sachs did not stand trial, in the technical sense although it certainly has in the court of public opinion, because it settled its charges with a payment of $550 million. Not only did the corporation not stand trial, but neither … Continue reading

Department of Justice Has Six Ongoing Investigations of JPMorgan

By Pam Martens: August 8, 2013  If a major Wall Street firm is being investigated by the Securities and Exchange Commission (SEC), that’s one thing. The SEC has no criminal powers to prosecute. And when it comes to Wall Street mega banks, there is a long tradition of fines and slaps on the wrist rather than prosecutions.  But when there is an open investigation by the Department of Justice, which does possess the power to criminally prosecute, there should be concern in the marketplace, if for no other reason than the fact that there is significant public attention being paid to the DOJ’s failure to prosecute big Wall Street firms.  Yesterday, JPMorgan Chase filed its quarterly 10Q with the SEC. If ever there was a document making a convincing case for breaking up the big banks and restoring the Glass-Steagall Act, this is it.  JPMorgan reported it is under investigation … Continue reading

Wall Street’s Metals Cartel On Trial Today in the Senate

By Pam Martens: July 23, 2013  If you think Wall Street’s rigging of foreclosures to struggling homeowners, or rigging interest rate swaps sold to municipalities, or rigging the Libor interest rate benchmark is the extent of its cartel activities, think again. Today, in U.S. Senate chambers, expert witnesses will make the case that the London Metal Exchange (LME) has become little more than a rigged Wall Street game to benefit a handful of powerful Wall Street firms while costing consumers and the economy greatly.  The Senate Banking Subcommittee on Financial Institutions and Consumer Protection, chaired by Senator Sherrod Brown, will hold a hearing titled: “Examining Financial Holding Companies: Should Banks Control Power Plants, Warehouses, and Oil Refineries?”  Timothy Weiner, Global Risk Manager of the giant beer brewer, MillerCoors LLC, has told the Senate in his written statement that his company’s concerns about the London Metal Exchange are shared by many other companies, … Continue reading

Dreyfuss’ Hedge Hogs Timely Read As FERC Fine Against JPMorgan Looms

By Pam Martens: July 19, 2013 Hedge Hogs, the Barbara Dreyfuss book that hit number 9 on the Washington Post’s Hardcover Bestseller List last week, should have a cautionary logo: “Don’t Start Reading This Book Late In the Day: It Could Be Hazardous To Your Sleep.” If you are an avid follower of Wall Street, you’ll read it in one sitting.   Sales of the book may soar if, as reported yesterday, JPMorgan reaches an estimated $500 million settlement with the Federal Energy Regulatory Commission shortly for rigging energy markets and we learn the details of just what its traders were doing to manipulate energy prices.  What does this have to do with Hedge Hogs? The Dreyfuss book is the fast moving and riveting account of Amaranth Advisors LLC, the hedge fund that went from holding $9.668 billion in client assets in August 2006 to flaming out in losses exceeding $6 billion … Continue reading

About That $500 Million JPMorgan May Shell Out to FERC

By Pam Martens: July 18, 2013  The Wall Street Journal and the New York Times are reporting this morning that JPMorgan Chase, the mega Wall Street bank that has shelled out over $16 billion in the last three years for legal expenses connected to investigations and lawsuits, may shortly be inking a deal with the Federal Energy Regulatory Commission (FERC) that would settle claims it manipulated energy prices. The price tag for making another regulatory mess go away, says the New York Times, may reach $500 million.  The specifics of just what charges JPMorgan will be settling are not yet available, but the path to this outlay of a cool half billion is, without question, related to a regulator incensed with what it believes to be stonewalling on the part of JPMorgan’s lawyers.  On November 14, 2012, FERC suspended JPMorgan Ventures Energy Corp.’s electric market-based rate authority for submitting false information … Continue reading

MF Global and Wall Street: Whose Job Is It To Take the Keys Away

By Pam Martens: June 28, 2013  The day after the U.S. House of Representatives’ Financial Services Committee held a hearing on why their seminal financial reform legislation, Dodd-Frank, is a bureaucratic boondoggle that will not prevent another taxpayer bailout of Wall Street in the event of a systemic collapse, we learn just how vulnerable the system is to powerful men allowed to play with other people’s money.  Yesterday, the Commodity Futures Trading Commission (CFTC) brought charges in Federal Court against MF Global, its former CEO, Jon Corzine, and its former Assistant Treasurer, Edith O’Brien. Corzine is a former U.S. Senator and Governor of New Jersey. The two are charged with the unlawful allocation of customer money at the commodities trading firm. The company has agreed to settle the charges against the firm for $100 million. The claims remain outstanding against the individuals.  MFGlobal collapsed in October 2011. Corzine had directed the … Continue reading

It has been the contention of Wall Street On Parade for more than a decade that today’s so-called “universal banks,” also variously known as megabanks or Global Systemically Important Banks (G-SIBs), are a banking model from hell that was thoroughly discredited in the tens of thousands of transcripts and documents released by the U.S. Senate following its multi-year investigation of that structure in the early 1930s. Now the seminal book proving that theory has been published. Written by Arthur E. Wilmarth, Jr. and titled Taming the Megabanks: Why We Need a New Glass-Steagall Act, the book brilliantly takes the reader through a riveting guided tour covering the past century and the resurrection of this same disastrous U.S. banking model in 1999. Oxford University Press is the publisher of Wilmarth’s book. We can envision it becoming one of the most important works of this century in providing the impetus for Congress … Continue reading

Personal Investing Lessons from JPMorgan’s London Whale Debacle

By Pam Martens: March 22, 2013  One year ago this week, Ina Drew, head of the Chief Investment Office at JPMorgan which oversaw the synthetic credit derivatives portfolio that eventually blew up $6.2 billion of depositors’ money, told her traders “phones down,” signaling that she was halting all trading in those instruments. What Drew should have much earlier told her traders was: “unplug algorithms; plug in brains.”  Despite a multitude of formulas for measuring risk, multiple layers of oversight management, 28 members of a risk management team with titles like Managing Director, Executive Director, and Vice President, it somehow didn’t occur to any of these folks that the number one criteria for a trading investment is that you need to be able to get out of it.  London Whale was the nickname given to the JPMorgan trader, Bruno Iksil, as a result of the outsized bets he was making on … Continue reading

Senate Censors Part of Report on JPMorgan About Its Stock Trading

By Pam Martens: March 18, 2013  The 307-page report the Senate released last Thursday on JPMorgan’s cowboy culture was deeply unsettling; the testimony under oath at the related Senate hearing on Friday was equally shocking with eyewitness accounts confirming that CEO Jamie Dimon ordered the withholding of  financial data to a regulator while both he and the Chief Financial Officer at the time, Douglas Braunstein, presented an Alice in Wonderland version of facts to the public in April 2012.  But it now appears that the worst of this story may be so unsettling to the markets and the public perception of Wall Street that it must be censored from public viewing. Throughout the Senate Permanent Subcommittee on Investigation’s 98 exhibits of emails and internal memos on the wild trading schemes at JPMorgan, the word “Redacted” appears.  In a high number of the areas where the material is censored, it concerns … Continue reading

Is Wall Street Still Dangerous? Yes, According to Senate Hearings

By Pam Martens: March 8, 2013  For years I’ve used the phrase “Frankenbanks” in my articles – those global banking behemoths created as a result of the repeal of the Glass-Steagall Act in 1999 that allow the co-mingling of FDIC insured mom and pop savings accounts with investment banking activities that blow up things using the mom and pop savings accounts leveraged to the hilt. Now the U.S. Senate is making my case for me on the use of Frankenbanks as an appropriate soubriquet.  If we date the run up to the financial crisis as beginning in the summer of 2007, which the Office of the Comptroller of the Currency does, it is more than five years since Congress has been studying why Wall Street is very adept at blowing up things but adept at not much else – like its main job of fairly allocating capital to new companies that … Continue reading