JPMorgan Chase Under The Microscope
March 27, 2013 by UPI - United Press International, Inc.
NEW YORK (UPI) — A spokesman for JPMorgan Chase, acknowledged the U.S. financial giant is currently the subject of numerous regulatory probes.
“Jamie and other executives feel terrible that the bank’s self-inflicted mistakes have put regulators in an awkward position,” said bank spokesman Joe Evangelisti, referring to the bank’s Chairman and Chief Executive Officer James Dimon.
Evangelisti said the bank was cooperating with authorities “to make things right.”
JPMorgan Chase is currently the target of investigations by at least eight agencies including Justice Department, the Securities and Exchange Commission, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the Commodity Futures Trading Commission and the FBI, the New York Times reported Wednesday.
In addition, Congress has called bank executives to testify in Washington concerning a highly publicized trading loss of $6.2 billion that occurred in a JPMorgan office in London last year.
The investigations include attempts to ferret out criminal behavior and bank carelessness that may have contributed to those losses.
JPMorgan is also under investigation by authorities looking to see when and how much bank officials knew about New York investor Bernard Madoff’s multi-billion Ponzi scheme.
At issue is how early bank officials may have suspected or known Madoff’s firm was illegitimate and how long they might have kept quiet about their suspicions.
Irving Picard, the court-appointed trustee charged with retrieving as much of the lost funds as possible has filed a lawsuit against JPMorgan claiming at least one official at the bank knew Madoff’s operation was fraudulent 18 months before he was arrested.
The myriad investigations are somewhat new for JPMorgan, which was seen as one of the large U.S. banks that survived the 2008 financial crisis in relatively good shape, the Times said.
Sources familiar with another investigation said JPMorgan is suspected of botching a review of mortgage files that were mandated by a multi-bank settlement over foreclosure abuses.
The bank may have incorrectly reported on more than 5,000 mortgage files out of 880,000 that it had to review.
Other banks have also made mistakes in their reporting, the Times said and the mistakes appear not to be deliberate. People close to the issue said JPMorgan may have over-estimated the problems found in the review.