JPMorgan Chase guilty (again) of fraud
There are quite a few cases of alleged or admitted fraud that JPMorgan Chase has been involved in recently I’m losing count. Well here is another one (Wall Street Journal, JPMorgan Settles Muni-Bid Case, 7/8/11). Does this bank have an ethical bone in its body?
J.P. Morgan Chase & Co. agreed to a $228 million settlement to charges it rigged nearly 100 transactions involving municipal-bond auctions, federal and state authorities said.
It is the third, and largest, settlement reached with a bank in a continuing investigation into an alleged nationwide conspiracy to rig municipal-bond bidding processes. Banks bid for the business to invest the proceeds municipalities raise by selling bonds. Last year, Bank of America Corp. agreed to pay $137 million and in May, UBS AG agreed to pay $160.2 million.
The Securities and Exchange Commission, in a civil lawsuit, alleged that J.P. Morgan, the nation’s second largest by assets, manipulated the bidding process from 1997 to 2005. The SEC said agents handling the auctions gave J.P. Morgan a “last look” at all the bids, thereby allowing J.P. Morgan to win the auctions. The SEC complaint also alleged J.P. Morgan submitted intentionally losing bids to allow other banks to win auctions, and steered business to the agents that rigged the bids. The SEC said the rigging happened on at least 93 transactions in 31 states.
The New York-based bank said in a statement that it does not “tolerate anticompetitive activity or violations of law” and that the investigation focused on “a small desk that was discontinued.” The bank also pointed out that the employees, who are no longer at the bank, hid their actions from management.
J.P. Morgan said the net total it would pay was $211.2 million: $51.2 million to the SEC; $50 million to the Internal Revenue Service; $35 million to the Office of the Comptroller of the Currency; and $75 million to the states involved. The bank said the payments wouldn’t materially affect its earnings.
There are concurrent court settlements with the various parties involved and there is some overlap, so while the agreement with the states is actually for $92 million, $17 million of that will go to other agencies, said Susan E. Kinsman, a spokeswoman for Connecticut State Attorney General George Jepsen, who headed the investigations for the states.
It is the second settlement J.P. Morgan has reached with the SEC in just over two weeks. In late June, the bank agreed to pay $153.6 million to settle charges its employees aggressively sold a complex debt security while failing to inform the investors about certain material facts.
The muni-auction settlements also included enforcement actions from the Federal Reserve and the OCC demanding that the bank increase its risk compliance management.
Federal tax laws require proceeds of municipal-bond sales to be invested at fair-market value. Bidding agents typically organize a process in which banks compete on bids for the investment business in order to ensure the fair-market-value test is met.
The Justice Department has identified more than a dozen banks as alleged co-conspirators in the bid-rigging probe.However, federal and state agencies allege widespread collusion between the bidding agents and big banks corrupted the process across dozens of states during the late 1990s and first half of the 2000s. The Justice Department has identified more than a dozen banks as alleged co-conspirators. To date, 18 people have been charged.
“When powerful financial institutions … conspire with each other to intentionally violate regulations designed to ensure fair investment prices, the integrity of the municipal marketplace becomes corrupted,” said Elaine C. Greenberg, head of the SEC’s Municipal Securities and Public Pensions Unit.
As part of its deal with the Justice Department, J.P. Morgan won’t face a criminal antitrust prosecution if it meets a series of conditions, including cooperating with the investigation. The bank also admitted and accepted responsibility for the illegal conduct of its former employees.
The SEC also said Thursday that it has barred former J.P. Morgan vice president James L. Hertz from the securities industry based on his guilty plea last December in connection with municipal-bond transactions. Mr. Hertz has been cooperating with the probe.
Bad bad Chase, Lawsuits | admin July 10, 2011
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By Home Mortgage Services, August 17, 2011 @ 4:29 am
I think you said it best when you said, conspire with each other to intentionally violate regulations designed to ensure fair investment prices. If this was done in any other sector of our economy, it would be handled very quickly. However, if we take a look back at when this happened, how long did it REALLY go on for.
By VaniNY, September 8, 2011 @ 5:16 am
I would like to report how Chase abused me and stole money from me.
1. I opened two accounts – one savings and one checking.
2. I told Chase that I NEVER wanted OVERDRAFT protection – meaning, I did not want Chase to automatically debit money from any my accounts for purchases made when my Checking account was in the red. I also authorized free overdraft protection. So, theoretically, if I tried to buy something using my checking account, if there was not money in that account, Chase was supposed to reject that purchase.
3.Lastly, I set it up so that purchases were supposed to go automatically through my savings account, so that I would not be bombarded with overdraft issues concerning my checking account, which has very little money.
CHASE DID NOT DO WHAT I REQUESTED.
1. THEY SET UP MY ACCOUNTS SO THAT EVERY PURCHASE WOULD AUTOMATICALLY GO THROUGH MY NON-INTEREST BEARING CHECKING ACCOUNT, WHCIH NEVER HAD MUCH MONEY IN IT.
2. SECONDLY, THEY STILL PUT THROUGH OVERDRAFT PURCHASES, CHARGING ME $33 PER TRANSACTION AND FLEECING ME FOR NEARLY $1000.00.
3.CHASE IMPLEMENTS SECURITY QUESTIONS WHICH CONCERN YOUR PRIVATE LIFE SUCH AS WHERE YOU LIVED WHEN YOU WERE 18, WITH WHOM YOU PREVIOUSLY RESIDED, PEOPLE YOU PREVIOUSLY KNEW. WHEN I PROTESTED THIS AND ASKED A CHASE REPRESENTATIVE FOR THE REGULATING AGENCY THAT OVERSEES THEIR ETHICS OF THEIR CONSUMER PRACTICES, THEY REFUSED TO GIVE ME THAT INFORMATION.
CHASE REALLY,REALLY, REALLY DOES SUCK. THEY ARE LIARS, CHEATS, IN LEAGUE WITH THE DEVIL. THEY DO WORK THAT ONLY THE IMMORAL WOULD DO. THE GOVERNMENT REALLY DROPPED THE BALL ON THIS BANK. THEY BASICALLY HAVE A LICENSE TO STEAL. NO ONE IS CHECKING UP ON THEM, NO ONE IS PROTECTING AMERICANS OR RESIDENTS RESIDING ON AMERICAN SOIL FROM THEM.
I HIGHLY ADVISE ANYONE WHO WOULD LIKE TO PROTECT THEMSELVES TO NEVER, NEVER, NEVER USE THIS BANK. TRY TO JOIN A CREDIT UNION.
By Catherine, September 11, 2011 @ 9:09 pm
With almost a million readers a year on my websites, I’ve had nothing but problems with Chase and their attempt to create a non-profit account for me.
Four accounts later …
Is this really how you run a bank?
I don’t know about their troubles listed here, I can only speak for their awful banking practices, especially when it comes to the digital world.
It’s as if they are etching numbers on a rock.
Or they exist in the 1900’s …. and god-forbid any of their systems actually talk to each other.
If they suspect foul-play on your account they will take every measure to shut you down, assuming it is because of you — never questioning that it might be a security breach on their end and the fault is theirs.
But no. You must pay the price.
By my 3rd debit card, I was done.
They are just awful.
Talking on the phone to customer service in Bangladesh does nothing.
Oh wait, but the security breach is my fault.
And you Chase would like to sell me some desert property in Florida …