Posts tagged JPMorgan

JPMorgan Chase & Co.’s (JPM) wrong-way bets on derivatives are the focus of an escalating probe by a U.S. Senate panel led by Carl Levin that has grilled executives from banks including Goldman Sachs Group Inc. and HSBC Holdings Plc, three people briefed on the inquiry said.

Levin’s Permanent Subcommittee on Investigations is seeking testimony from people who worked in or helped lead JPMorgan’s chief investment office, according to the people, who declined to be identified because the inquiry isn’t public. The unit’s London staff lost at least $5.8 billion this year on the botched bets, which were large enough to shift markets.        Source: Bloomberg

Oh no, everyone, terrible news: Wall Street is now officially leaderless in its fight to protect the American economy from the horrors of regulation.

That is according an alarming report on Tuesday from Bloomberg, which says that JPMorgan Chase CEO Jamie Dimon, Wall Street’s de facto champion, is having a hard time making his voice heard these days. Apparently the egg covering his face after his bank lost $6 billion, give or take, on dumb credit-derivative bets has formed a mask-like crust that even Dimon’s superhuman levels of hot air cannot penetrate: 

“What you’re seeing in the financial-services industry is a lack of any kind of credible statesmen,” said Rakesh Khurana, a management professor at Harvard Business School in Boston. Dimon’s diminished ability to defend the industry publicly “basically leaves a vacuum,” he said.

SOURCE: Huffingtonpost

Back in May, JPMorgan revealed a $2 billion trading loss from the ‘London Whale’ and as the summer progressed that number kept on growing.

AP

On May 10th, JPMorgan Chase revealed a $2 billion dollar trading loss in the bank’s Chief Investment Office in London related to derivatives trades from the so-called “London Whale.” 

And it only got worse throughout the summer.  

During the month of June, the bank’s CEO Jamie Dimon was grilled before the Senate Banking Committee and the House Financial Services Committee.  He maintained that it was an ”isolated incident” and said “senior management and myself should have better monitored the CIO office.” 

What’s more is when the bank released its Q2 earnings results on July 13th, it was revealed that the trading loss was $5.8 billion.  The bank also had to restate its Q1 net income saying it was $459 less than previously reported. 

Then there was the highly anticipated Facebook IPO, which ended up being plagued with problems.

CNBC

Facebook was one of the most highly-anticipated initial public offerings of all time, but its debut as a publicly traded company on the Nasdaq ended up being plagued by delays and glitches. 

Customers including Knight Capital, Citadel’s retail facing arm and Citi claimed to have lost millions from trading shares of the social network. 

What’s more is Facebook shares were priced at $38 a piece and these days they’re trading below $22 a share.

There was also the Morgan Stanley Facebook IPO disclosure scandal.

Mario Tama/Getty Images

Reuters Alistair Barr reported that research analysts at Facebook’s lead underwriters (Morgan Stanley, Goldman Sachs and JPMorgan) slashed their earnings estimates for the social network during the IPO roadshow and that information was then shared with institutional investors. 

At the time, our Editor-In-Chief Henry Blodget who has more than 20 years experience in the tech IPO business, called it “a highly unusual and negative event.”

What’s more Massachusetts Secretary of Commonwealth subpoenaed the bank over those analyst disclosures.  Morgan Stanley is also facing a shareholder lawsuit. 

Following the Facebook IPO fiasco, Morgan Stanley’s CEO James Gorman defended his bank on CNBC saying they acted “with great integrity.”  He added that Facebook investors will just have to be a little bit patient.  

Read More: Businessinsider

The JPMorgan Chase CEO is really, really, really sorry. Except when he’s not.

(Photo: Andrew Harrer/Bloomberg via Getty Images)

Even here, on his own turf, they are giving Jamie Dimon a hard time.

“Um, yeah, my question is kind of broad?” begins a gawky guy who identifies himself as a Tufts student interning in Client Solutions. “Earlier this summer we had the LIBOR scandal that was involved with a lot of the big banks and led to the resignation of the CEO from Barclays. More recently we had Sandy Weill saying the banks needed to be broken up. With the banks so big, how is it possible to monitor every aspect?”

Next up is a scruffy-haired kid from the University of Miami: “With banking in a secular or cyclical decline, do you truly believe that this is a good place for us to start our careers, considering all of the other opportunities available to us?” he asks.

“In an industry associated with surprisingly low standards … ” a woman from Emory University starts to say.

“Whoa, whoa, whoa,” the JPMorgan Chase CEO interrupts, leaning into the microphone and peering out at the several hundred summer interns, sweating in their first business clothes, that have gathered in the auditorium of the former Bear Stearns building for a friendly Q&A session with the boss. “Before you go to the next level of generalizing, saying, ‘all bankers,’ ‘all banks.’ I don’t like that.”

Read More: NYMag

Even though the major banks and trading firms are under intense scrutiny, they still rely quite heavily on trading activities to make money. And as JPMorgan’s “London whale” and a string of other banks have demonstrated, these institutions have a tough time keeping tabs on the amount of risk they are taking amid increasingly complex and fast market.

In many cases, a single set of mistakes was felt by the entire bank – and in a few instances the entire banking community – making it is clear that many risk factors involved are often completely overlooked, misunderstood or that banks are unable to manage them.

The recent “technology breakdown” at Knight Capital extends the paradigm of things that can go really bad, really quickly for financial firms in terms of their technology and trading. After all, it is not very hard to conceive a situation where a rogue trader (as in the case of UBS last year), a poorly thought through hedging strategy (as in the case of JPMorgan Chase this May) or a glitch in the systems of a stock exchange (with UBS unfortunately being on the receiving end yet again, this time during the Facebook IPO) actually brings the bank to its knees.

Read More: Forbes

Three JPMorgan Chase & Co. (JPM) investment bankers are leaving for Evercore Partners Inc. (EVR) and Centerview Partners LP, the latest dealmakers to depart a global lender for a merger advisory boutique.

Barrett “Brett” Pickett and Lowell Strug, who advised restaurant and other consumer companies at New York-based JPMorgan, are joining Evercore in the coming weeks, according to three people with knowledge of the matter. Adam Beshara, 38, who worked with manufacturers such as ITT Corp., starts at Centerview today, firm co-founder Blair Effron said.

Evercore and Centerview, both based in New York and started by veterans of some of Wall Street’s biggest banks, focus on advising large corporate clients on mergers and capital structure rather than trading or lending.

They’ve been hiring amid pay cuts and firings at the bigger firms.

Source: Yahoo Finance News

This spring has seen a veritable festival of revelations of illegal, stupid, and dishonest behavior by some of the largest banks in the world. There’s the massive trading loss at JPMorgan, originally quoted at $2 billion, now up to $5.8 billion at latest count. There’s the laundering of drug and terrorism money by HSBC. And, most spectacularly, there are the admissions of LIBOR-rigging at Barclays, and ongoing investigations at many other banks.

Note that JPMorgan, HSBC, and Barclays were all supposed to be “good” banks that made it through the crisis wearing halos compared to the supposed “bad” banks like Citigroup, Bank of America, and RBS.

Source: The Atlantic

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NYMag.

JPMorgan Chase allegedly called John and Anna Canaday 15 to 75 times a week between 2009 and 2012, claiming they were at risk of losing their home to foreclosure, according to a lawsuit filed by the couple earlier this month. The Canadays, both over 65 years old, claim they aren’t late on their mortgage payments (h/t: Courthouse News).

“It defies logic what seems to be happening here,” James McKiernan, the Canaday’s attorney, told The Huffington Post. “They brought in letters and dunning notices and it just continues. As I see it, they are fully current on all their obligations.”

The lawsuit alleges that the couple met with their local District Attorney and, with the DA’s advice, sent a cease and desist letter to the bank. Though the bank acknowledged that they received the letter, the harassment continued, according to the lawsuit.

Source: Huffington Post

JPMorgan Chase & Co (JPM.N) Chief Executive Jamie Dimon reshuffled managers just below him, signaling that the biggest U.S. bank is preparing for life after its famed boss.

The moves come two weeks after JPMorgan said it had lost nearly $6 billion from bad derivatives trades on corporate debt, representing a huge black eye for a chief executive long praised for his risk-management skills.

The management moves will mean a number of senior positions are jointly held by two executives. Analysts said the shared responsibility is a response to the trading losses that came from the bank’s chief investment office.

Source: Reuters