Once again, we’re reminded that there is no greater example of the state-enabled pillaging of Main Street by Wall Street than tonight’s breaking news that JP Morgan is about to conclude yet another agreement with our government to pay approximately $2 billion in fines and reparations as a result of its role in facilitating the fraudulent Ponzi scheme of none other than Wall Street poster boy Bernie Madoff.
This brings JPMC’s total legal tab (approx. $20 billion) and regulatory fines (approx. another $20 billion), combined, for their serial crimes against our society to somewhere around the $40 billion mark, over the past few years. (And, what generally doesn’t make headlines is that most--if not almost all--of these funds were and are tax deductible. And, it's still only a fraction of the bank's net profits since 2008.)
And, of course, it goes without saying—but I will—nobody’s gone to jail, or going to jail, except Bernie.
JPMC’s rap sheet of frauds and blatantly criminal acts (and, again, I’m only writing about the ones that have been prosecuted on a civil basis; because we already know that nobody significant, other than Madoff, is doing any jail time) it has perpetrated against Main Street over the past few years is so lengthy, even a reproduction of a just a fraction of them (see farther down, below), reminds us of how, even now, we live in a country where the banks not only run the place—and I AM talking about all three branches of our government—but they’re definitively above the law.
What else may one say when tonight’s coverage of this latest travesty reminds us, per Reuters, that (see bold type in blockquote, immediately below; diarist’s emphasis) in virtually every settlement in which virtually every Wall Street bank has been involved in the past five years, they’ve all sworn under oath that they’ll “change their behavior?”
(“Honest, yer honor! We won’t do it
until you catch us again!”)
JPMorgan nears $2 billion settlement in a case tied to Madoff: NYTAnd, here’s the NY Times (like every other MSM outlet that carries water for these banks, in terms of their convenient failure to mention historical context, apart from discussing it around the fringes, in their reportage of this travesty)…
Sun Jan 5, 2014 10:55pm EST
(Reuters) - JPMorgan Chase & Co is nearing a $2 billion settlement with federal authorities to resolve suspicions that the bank ignored signs of Bernard Madoff's Ponzi scheme, the New York Times reported, citing people briefed on the case.
The bank's civil and criminal settlements would also involve a deferred prosecution agreement, a criminal action that would suspend an indictment as long as the bank acknowledged the facts of the government's case and changed its behavior, the NY Times said.
As per the deal, JPMorgan will pay more than $1 billion to the prosecutors in Manhattan and the remainder to the Office of the Comptroller of the Currency (OCC) and a unit of the Treasury Department investigating breakdowns in the bank's safeguards against money laundering.
The government plans to use some of the payout for Madoff's victims, the paper said. (link.reuters.com/sur75v)
Madoff was convicted in 2009 of defrauding thousands of investors and is serving a 150-year prison sentence. JPMorgan has been accused of ignoring warning signs that Madoff's business was a fraud, often to win more fees and commissions for services they provided…
JPMorgan Chase Nears a $2 Billion Deal in a Case Tied to MadoffThe NYT does mention more (of the same) lies ahead for JPMC (double entendré)…
By JESSICA SILVER-GREENBERG and BEN PROTESS
New York Times
January 5, 2014, 10:00 pm
Working through a long list of legal problems, JPMorgan Chase is starting the new year with another steep payout to the government.
The bank plans to reach as soon as this week roughly $2 billion in criminal and civil settlements with federal authorities who suspect that it ignored signs of Bernard L. Madoff’s Ponzi scheme, according to people briefed on the case.
All told, after reaching the Madoff settlements with federal prosecutors in Manhattan and regulators in Washington, the bank will have paid some $20 billion to resolve government investigations over the last 12 months.
JPMorgan’s Madoff settlements, the people briefed on the case said, would also involve a so-called deferred prosecution agreement, a criminal action that would essentially suspend an indictment as long as JPMorgan acknowledged the facts of the government’s case and changed its behavior. The agreement, nearly unheard-of for a giant American bank and typically employed only when misconduct is extreme, underscores the magnitude of the case against JPMorgan.
The bank’s settlement talks with the authorities, reported by The New York Times last month, thrust JPMorgan into the spotlight on the fifth anniversary of Mr. Madoff’s arrest…
… But even as JPMorgan whittles down its regulatory woes, new threats have emerged. Authorities have opened a bribery investigation into JPMorgan’s hiring practices in China, prompting the bank to turn over internal emails and documents about its “Sons and Daughters” hiring program, which employed the children of the nation’s ruling elite…Rinse.
Quoting blogger David Dayen, from my post here on May 13th, 2013: “The Economic Terrorists Among Us”…
… Independent blogger and one-time Kossack David Dayen recently noted this about JPMorgan Chase…
Mirabile Dictu! JP Morgan Finally on Regulatory Hot Seat for Widespread Control Failures and Alleged Lying by Blythe Masters Under OathAnd, if you’ve been following JPMC over the past few years, Dayen’s only giving us a sampling of a much lengthier list.
May 3rd, 2013
…The fact that JP Morgan is in hot water isn’t news. Josh Rosner revealed in an extensive report released in early March that the bank had paid out over $8.5 billion in fines since 2009, nearly 12% of its net income, for violations across virtually all of its operations. This account showed the carefully cultivated picture of JP Morgan as a well-managed operation was an artful fabrication. As Dave Dayen wrote here in his overview:….as you read the report, it’s hard to see the bank as anything but a criminal racket just days away from imploding, were it not propped up by implicit bailout guarantees and light-touch regulators. Rosner paints a picture of a corporation saddled with pervasive internal control problems, which end up costing shareholders, and which “could materially impact profitability in the future.” ….It’s hard to summarize all of the documented instances in this report of JPM has been breaking the law, but here’s my best shot….In other words, the New York Times account is a pale rendition of the rap sheet against the bank…
Bank Secrecy Act violations;
Money laundering for drug cartels;
Violations of sanction orders against Cuba, Iran, Sudan, and former Liberian strongman Charles Taylor;
Violations related to the Vatican Bank scandal (get on this, Pope Francis!);
Violations of the Commodities Exchange Act;
Failure to segregate customer funds (including one CFTC case where the bank failed to segregate $725 million of its own money from a $9.6 billion account) in the US and UK;
Knowingly executing fictitious trades where the customer, with full knowledge of the bank, was on both sides of the deal;
Various SEC enforcement actions for misrepresentations of CDOs and mortgage-backed securities;
The AG settlement on foreclosure fraud;
The OCC settlement on foreclosure fraud;
Violations of the Servicemembers Civil Relief Act;
Illegal flood insurance commissions;
Fraudulent sale of unregistered securities;
Illegal increases of overdraft penalties;
Violations of federal ERISA laws as well as those of the state of New York;
Municipal bond market manipulations and acts of bid-rigging, including violations of the Sherman Anti-Trust Act;
Filing of unverified affidavits for credit card debt collections (“as a result of internal control failures that sound eerily similar to the industry’s mortgage servicing failures and foreclosure abuses”);
Energy market manipulation that triggered FERC lawsuits;
“Artificial market making” at Japanese affiliates;
Shifting trading losses on a currency trade to a customer account;
Fraudulent sales of derivatives to the city of Milan, Italy;
Obstruction of justice (including refusing the release of documents in the Bernie Madoff case as well as the case of Peregrine Financial).
Everywhere one looks these days during a typical 24-hour news cycle we’re reminded that most of what we’re reading and watching play out before us boils down to the succinct headline of Columbia University economics professor Joe Stiglitz’ latest Project Syndicate column, noted above and also linked here: “Lives versus Profits.”
The strip-mining of our society by the one percent and their multinational corporations is clearly—and, it is becoming clearer with every passing day--nothing less than state-sponsored terrorism. These days, we’re continually reminded that the wrong choices are being made by our irreparably broken and corrupt government(s). This story is constantly in our face and otherwise palpable. It’s everywhere. It’s: devastating our climate and our environment1; making a mockery of our rule of law2; eliminating our few remaining rights to privacy 3; physically eroding4 or privatizing5 our public spaces and infrastructure (with much of that infrastructure, in some areas of the U.S., built during the FDR era, back when we had a functioning government that, eventually, got around to working across party lines and doing the right thing for the 99%); stealing our homes6; bilking our state7 and municipal governments8; destroying our education system9; devastating our job market10; ruining the twilight years of our nation’s seniors11; and, at the same time, dashing the hopes and futures of our nation’s youth.12…
1 “Foes Suggest a Tradeoff if Pipeline Is Approved.” John M. Broder, NY Times (5/9/13)
2 “Why Foreclosure Fraud Is So Dangerous to Property Rights,” Barry Ritholtz, Big Picture Blog (10/12/10)
3 “U.S. Weighs Wider Wiretap Laws to Cover Online Activity,” CHARLIE SAVAGE, NY Times (5/8/13)
4 “Europeans Are Laughing At U.S.' Decaying & Antiquated Infrastructure, Utilities, Transportation,” Democratic Underground (11/16/12)
5 ”Obama Budget Talks Sale Of Tennessee Valley Authority, Largest Public Utility,” Travis Loller, Associated Press via Huffington Post (4/10/13)
6 “Independent Foreclosure Review Fiasco: OCC and Fed Decided Not to Find Harm,” Yves Smith, Naked Capitalism (4/18/13)
7 “How The ‘Bipartisan Consensus’ On Dodd-Frank & The Budget Enables The Pillaging Of Our Underclasses,” Bob Swern, Daily Kos (4/25/11)
8 “Sewers, Swaps and Bachus,” Joe Nocera, NY Times (4/23/11)
9 “American Education is being Deliberately Destroyed - But Why?” Michael Potash, Reader Supported News (3/9/12)
10 “Better jobs reports don't help this lost generation of unemployed young adults,” Guardian UK (5/3/13)
11 “Many Americans say they can't retire until their 70s or 80s,” Walter Hamilton, LA Times (5/7/13)
12 “The Idled Young Americans,” David Leonhardt, NY Times (5/5/13)
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When it comes to money laundering for criminals and terrorists, here’s yet another “minor” example (from my post here, just four days ago) from JPMC’s rap sheet…
...The Economic Terrorists Among Us—to name just a few, specifically: HSBC, JPMorgan Chase, Standard Chartered Bank and Wachovia, which has been rolled-up into Wells Fargo—have received little more than wrist slaps, fines equivalent to no more than few months of their net profits, and no jail time, whatsoever, for laundering more than $1.5 trillion in al Qaeda, Hezbollah, South American drug cartel, and eastern European organized crime cash. And, in case you weren’t paying attention, the inconvenient reality is that our country’s intelligence services, which were closely monitoring all of this activity, didn’t do a damn thing about it...(Frankly, IMHO, a couple hundred billion dollars in laundered funds should be more than an ample amount of cash for our government to "follow the money" for scores of criminal investigations, shouldn't it? So, I'd be very interested in hearing our government's excuse[s] for U.S. regulators enabling the laundering of $1.5 trillion. I guess they just wanted to make sure they had all their ducks in a row, right? LOL!)
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Yes, JP Morgan employees certainly got to “Know Your Customer,” as Pam Martens reminded us in this outstanding backgrounder on the JPMC-Madoff story that she published at the end of October…
JPMorgan Is In a Boatload of Trouble Over Madoff: Here’s WhyI really hope readers will make an effort to read Martens' entire piece, linked and blockquoted immediately above, to understand the true and total regulatory breakdown that's taking place before us, and in terms of how it impacts virtually every aspect of our society.
Wall Street On Parade
By Pam Martens: October 29, 2013
There are five words that neatly sum up JPMorgan Chase’s dilemma in its efforts to avoid a deferred prosecution agreement or a more serious outcome over its handling of Bernard Madoff’s business account for more than two decades: the “Know Your Customer Rule” and recidivism.
The Know Your Customer Rule is ingrained in every banker and broker on Wall Street by the legions of compliance officers who send out terrifying memorandums depicting recent examples in the news or the courts of what happens to unwitting financial reps who didn’t know their customers. The memos are backed up with equally terrifying compliance meetings and compliance handbooks that one must acknowledge receiving in writing. Some firms now require brokers to take computer-based continuing education classes which further enshrine the mandates of the Know Your Customer Rule.
The object of this rule is to make the banker or broker responsible for determining the legitimate line of work the customer is engaged in while monitoring the account regularly to see if the transactions correlate to that legitimate business. The overall goal is to protect the Nation’s banking system from being a conduit for money laundering or other illicit activities.
It is not uncommon to receive a phone call from the bowels of the compliance department if something appears amiss. I once received such a call because a parent who was a client wanted to transfer a large sum from his account to his son’s account to help him buy a home. These were both long term clients whom I knew from my own town and who had done nothing more alarming in a decade than collect muni bond interest in their accounts. I had to get a copy of the purchase contract on the home to satisfy the inquiring minds in compliance…
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Elsewhere in Daily Kos' ongoing coverage of recent sociopathic, Wall Street behavior, I strongly encourage folks to checkout Kossack shanikka's outstanding post on Ocwen Financial's egregious criminality, and (as you'll glean it from the title of her post) what $2 billion really means to these TBTF firms: "When is $2.1 billion just chump change?"
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