The Department of Justice is launching a probe into JPMorgan’s energy business, the Wall Street Journal reports.
Now you may be thinking to yourself — another one? More? Yes, more. The government is going after JPMorgan like it never has before, and the House of Dimon was warned specifically about their energy business this Spring.
In May the New York Times reported that government officials were looking into JPMorgan’s dealings in energy markets. By July, the bank was paying a $US410 million fine to settle accusations from the Federal Energy Regulatory Commission.The bank neither admitted nor denied wrongdoing.
Somehow, though, that’s not the end. In the New York Times’ May report, regulators specifically mentioned looking into testimony by JPMorgan commodities head Blythe Masters. According to them, Masters denied knowing anything about alleged “schemes” carried out by JPMorgan energy traders in Houston.
When Masters wasn’t mentioned in the FERC settlement, though, it wasn’t that surprising. When was the last time a big wig at a Wall Street bank was really punished?
Now it seems that regulators were just getting started, actually, and the drama at JPMorgan Ventures Energy Corporation isn’t over. That’s about the last thing the bank needs. This weekend news broke that regulators are investigating the bank for hiring “princelings” — the offspring of China’s ruling class — in order to generate business. That’s a violation of the Foreign Corrupt Practices Act.
Then of course there’s the upcoming MF Global trial, where Jon Corzine and another executive from the defunct brokerage will have to answer for the loss of over $US1 billion in customer funds — JPMorgan was MF Global’s bank.
The bank is also under pressure from regulators and politicians to get rid of its physical commodities business — one that if stumbled into in the chaos of the financial crisis.
Anyone else got something for JPM while we’re at this?