JPMorgan Chase is currently facing a slew of problems from the London Whale trading loss to subprime mortgage lawsuits from the financial crisis.
Once the darling of Washington, D.C., the bank has now received regulatory inquiries and investigations from the DOJ, CFTC, SEC, multiple state attorneys general, the European Commission, UK Financial Services Commission, Canadian Competition Bureau, and Swiss Competition Bureau, according to its most recent 10Q filing.
It seems like every other day there’s a new negative headline regarding the bank. Today we’ve had three new ones.
We’ve included a rundown of the issues the bank has been dealing with lately:
- The FHFA is seeking a $6 billion fine from JPMorgan over mortgage claims from the financial crisis, the Financial Times’ Kara Scannell and Tom Braithwaite reported late yesterday. JPMorgan doesn’t want to pay the fine, the report said. It would also be one of the biggest penalties paid by a bank following the crisis.
- The Wall Street Journal’s Dan Fitzpatrick reports that JPMorgan may end up paying between $500 and $US600 million between the Justice Department, the SEC, CFTC, Office of the Comptroller of the Currency and the U.K.’s Financial Conduct Authority over the “London Whale” trade.
- The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau plan to pursue civil actions against JPMorgan for allegedly duping credit card customers into buying products to protect them from identity left, Dealbook’s Jessica Silver-Greenberg and Ben Protess report. The pair of regulators are seeking at least $80 million in penalties, the report said.
- The Justice Department is examining J.P Morgan’s energy practices, The Wall Street Journal’s Dan Fitzpatrick and Devlin Barret reported last week. The DOJ investigation comes after a similar FERC probe last month. The bank settled that electricity manipulation case for $410 million after its energy unit was accused of gaming electricity rates in California and the Midwest.
- Earlier this month, JPMorgan disclosed it is under a rare criminal investigation (in addition to a civil one) regarding its sale of mortgage-backed securities during the run-up to the financial crisis.
- Antibribery investigators also opened an investigation into whether the bank hired the children of powerful Chinese families to help JP Morgan win business deals, the New York Times’ Jessica Silver-Greenberg, Ben Protess, and David Barboza reported this month.
- In its quarterly 10Q filing, the bank wrote it had received a request for information from the New York State Department of Financial Services regarding “forbearance practices orbearance practices for loans serviced by the firm that are secured by residential property in Superstorm Sandy FEMA-designated counties in New York State.”
- In addition, the firm is looking at requests from several states “relating to unclaimed property and the Firm’s compliance with escheatment laws.”
- Also in the filing, the bank said the Justice Department (among other bodies) is investigating its role in last year’s scandal regarding Libor, the widely used interest rate benchmark tied to trillions of dollars worth of loans.
- The bank also said it is responding to various investigations related to Bernie Madoff, including one from the Justice Department. The bank is facing multiple suits alleging it “aided and abbeted breach of fiduciary duty.”
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