Tagged: JP Morgan Chase

The $9 billion witness — JP Morgan’s worst nightmare

Alayne Fleischmann

Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn’t take it anymore.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.'”

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She’s had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing…

Six years after the crisis that cratered the global economy, it’s not exactly news that the country’s biggest banks stole on a grand scale. That’s why the more important part of Fleischmann’s story is in the pains Chase and the Justice Department took to silence her…

This past year she watched as Holder’s Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called “statements of facts,” which were conveniently devoid of anything like actual facts.

And now, with Holder about to leave office and his Justice Department reportedly wrapping up its final settlements, the state is effectively putting the finishing touches on what will amount to a sweeping, industrywide effort to bury the facts of a whole generation of Wall Street corruption. “I could be sued into bankruptcy,” she says. “I could lose my license to practice law. I could lose everything. But if we don’t start speaking up, then this really is all we’re going to get: the biggest financial cover-up in history.”

I won’t try to edit this superb Taibbi article down to something that fits the front page of a blog post. RTFA.

Suffice it to say Matt Taibbi has taken Alayne Fleischmann’s inside information about joint corruption between Wall Street Banks and our so-called department of Justice to whitewash syndicated crime on a scale never before seen. It brought us the Great Recession, an economic crash sufficient to sink the American economy absent the frantic and creative Keynesian scrambling and dispensing of billion$ in loans to keep the rolling disaster afloat.

It’s long and loaded with firsthand details. The details our government and most of our Free Press has been smothering with sound bites and sleight-of-hand for years.

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Banking security stronger — and scarier!

masked fraud

The caller said her home had burned down and her husband had been badly hurt in the blaze. On the telephone with her bank, she pleaded for a replacement credit card at her new address.

“We lost everything,” she said. “Can you send me a card to where we’re staying now?”

The card nearly was sent. But as the woman poured out her story, a computer compared the biometric features of her voice against a database of suspected fraudsters. Not only was the caller not the person she claimed to be, “she” wasn’t even a woman. The program identified the caller as a male impostor trying to steal the woman’s identity.

The conversation, a partial transcript of which was provided to The Associated Press by the anti-fraud company Verint Systems Inc., reflects the growing use of voice biometric technology to screen calls for signs of fraud.

Two major U.S. banks, JPMorgan Chase & Co. and Wells Fargo & Co., use voice screening, also known as voice biometric blacklists, according to three people familiar with the arrangements, all of whom spoke on condition of anonymity because the system was meant to remain secret…

A recent AP survey of 10 leading voice biometric vendors found that more than 65 million people worldwide have had their voiceprints taken, and that several banks, including Barclays PLC in Britain and Minneapolis-based U.S. Bancorp, are in the process of introducing their customers to the technology.

Like that phrase? “Introducing their customers to the technology?” Asking the banks for more info gets answers like…”sharing any information about our fraud prevention measures would jeopardize their effectiveness”.

Neither Wells Fargo nor Chase responded to questions specifically addressing the legality of their voice harvesting.

Meanwhile, our state and federal elected officials have done nothing about implementing oversight or regulation of the uses of this technology.

The technology, of course, isn’t the villain in the piece. Products like this or any other aren’t inherently good or evil. The people using them determine the conditions for that value judgement.

Two charged for hiding JP Morgan’s London Whale trading-loss

Two former employees of JP Morgan Chase have been charged with concealing the size of the investment bank’s $6bn trading loss last year.

Javier Martin-Artajo, 49, and Julien Grout, 35, and their co-conspirators were accused on Wednesday of “artificially increasing the market value of securities to hide the true extent of hundreds of millions of dollars of losses”, according to court papers filed by US prosecutors.

Martin-Artajo oversaw JP Morgan’s trading strategy in London, while Grout recorded the value of the soured investments.

The pair were charged in federal criminal complaints with conspiracy to falsify books and records, commit wire fraud and falsify Securities and Exchange Commission (SEC) filings…They also were charged separately in an SEC civil complaint…

The Wall Street Journal’s website reported that US prosecutors had reached an agreement with Bruno Iksil, a former JP Morgan trader who executed the giant trades and who was known as the “London whale”, in which he would not be criminally prosecuted for his conduct.

Iksil has agreed to fully cooperate with the investigation by US authorities as part of the deal, according to documents filed on Wednesday by the US attorney’s office quoted by the newspaper.

Overdue.

JP Morgan Chase, Credit Suisse pay $416.9m penalties for phony residential mortgage-backed securities

JP Morgan Chase and Credit Suisse will pay a combined $416.9 million to settle US civil charges that they misled investors in the sale of risky mortgage bonds prior to the 2008 financial crisis…

JP Morgan would pay $296.9 million, while Credit Suisse will pay $120 million in a separate case, with the money going to harmed investors, the US Securities and Exchange Commission said.

Both settlements addressed alleged negligence or other wrongdoing in the packaging and sale of risky residential mortgage-backed securities (RMBS), including at the former Bear Stearns Co, which JP Morgan bought in 2008. The banks settled without admitting wrongdoing and in separate statements said they were pleased to settle…

Goldman Sachs in 2010 agreed to pay $550 million, also without admitting wrongdoing, to settle SEC charges that it misled investors in a complex mortgage bond transaction.

The enforcement actions are the second and third from a “working group” of federal and state agencies created this year by President Barack Obama to investigate misconduct related to RMBS that contributed to the financial crisis.

And they ain’t over and done, yet.

Foreclosures slow down as systematic document flaws exposed

The foreclosure machinery that has forced millions of Americans out of their homes is beginning to seize up as some lenders and their lawyers are accused of cutting corners in their pursuit of rapid home repossessions.

Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by two of the country’s biggest home lenders in the last two weeks.

Even lenders with no known problems are expected to approach defaulting homeowners more cautiously and look more aggressively for resolutions short of outright eviction…

GMAC has acknowledged legal missteps in processing mortgages, and JPMorgan Chase has acknowledged the possibility of missteps, and both have suspended all foreclosures in the 23 states where they need a court’s approval. That’s 56,000 in the case of Chase alone; GMAC declined to provide a number…

The federal government has been the majority owner of GMAC since supplying $17 billion to prevent the lender’s failure during the financial crisis…

Taxpayers provided the capital; but, no one kicked a sufficient number of Bush-era pickpockets out of management.

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Ten of the biggest US banks paying back bail-out


Daylife/Reuters Pictures used by permission

Ten of the nation’s largest banks have received a green light from the Treasury Department to repay $68 billion in government bailout money that they got during the height of the financial crisis.

The banks have been busy strengthening their balance sheets in recent weeks by raising private capital. This move raises hope that the worst of the banking crisis is over.

The ten banks, including JPMorgan Chase, Capital One and Goldman Sachs, all got a clean bill of health following the recent stress test administered by government regulators.

Many had voiced a desire to pay back the money. Some had taken it very reluctantly, at the insistence of the Bush administration as it was trying to stabilize the financial system and insure that banks had money to lend. Along with the money came government limits on compensation for executives, which the banks are anxious to escape.

As the financial system has stabilized and the economy has shown signs of bottoming out, a number of the banks have been able to raise new capital from investors.

If the 10 large banks repay the full $68 billion, it would be a development welcomed by Congress and taxpayers. Added to loans already repaid by some smaller banks, it would bring the amount of TARP funds recovered to $70 billion. That’s about one-third of the nearly $200 billion the Treasury has injected into the nation’s banks.

Not so incidentally, these ten banks have also provided $2 billion in dividends to the Treasury during the course of the so-called bailout.

Yes, that’s right. We, the taxpayers, made money on this part of the deal.