NYT: JPMorgan Faces Multiple Criminal Investigations
Apr 10, 2013 at 1:00 PM
DailyBail in JP Morgan, bank fraud, bernie madoff, bernie madoff, corruption, criminal investigation, criminal justice, foreclosure, jamie dimon, jamie dimon, jpm, jpmorgan, london whale, nyt

Jamie will meet with prosecutors later this month.  At least 8 federal agencies are investigating the bank.


JPMorgan Faces Full-Court Press of Federal Investigations

NYT Dealbook

As the nation’s strongest bank, JPMorgan Chase used to be known for carrying special sway with regulators. Now it increasingly finds itself in the cross hairs of federal authorities.

At least two board members are worried about the mounting problems, and some top executives fear that the bank’s relationships in Washington have frayed as JPMorgan becomes a focus of federal investigations.

In a previously undisclosed case, prosecutors are examining whether JPMorgan failed to fully alert authorities to suspicions about Bernard L. Madoff, according to several people with direct knowledge of the matter.

And nearly a year after reporting a multibillion-dollar trading loss, JPMorgan is facing a criminal inquiry over whether it lied to investors and regulators about the risky wagers, a case that could accelerate when the Federal Bureau of Investigation and other authorities interview top JPMorgan executives in coming weeks.

All told, at least eight federal agencies are investigating the bank, including the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission and the Securities and Exchange Commission. Federal prosecutors and the F.B.I. in New York are also examining potential wrongdoing at JPMorgan.

A recent misstep points to the growing friction between JPMorgan and regulators as well as to the concerns within the bank.  JPMorgan misstated how the bank may have harmed more than 5,000 homeowners in foreclosure, according to several people briefed on the matter.  The bank’s primary regulator, the Office of the Comptroller of the Currency, is expected to collect a cash payment from the bank to remedy the flawed review of loans.

The mortgage errors, while by themselves relatively minor, have heightened concerns within JPMorgan because they come on top of the other investigations.

In April, according to people briefed on the matter, senior executives are expected to meet with investigators who are examining the London Whale trading loss.  A handful of executives have already met with authorities, but the second round will include Mr. Dimon.  While he is not suspected of any wrongdoing, the officials hope Mr. Dimon will help build a case against traders in London suspected of lowballing their losses.

The investigators will also seek information about whether some top bank executives misled investors and regulators about the severity of the losses.  Even as losses mounted last year, the bank did not publicly disclose the problem for months.  The bank has said that “senior management acted in good faith and never had any intent to mislead anyone.”

But the S.E.C. is also examining such disclosures.  And under the Dodd-Frank regulatory law, the F.D.I.C. is investigating the trading loss, according to people briefed on the matter.

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