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.
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.
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.
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.