Profiting On The Death Of Employees - The JPMorgan Way
The Other Thing JPMorgan Was Doing in Its Chief Investment Office: Profiting On the Death of Employees | wallstreetonparade.com/2013/03/the-ot…
— Daily Bail (@TheDailyBail) May 10, 2013
WITHOUT CONSENT
The Other Thing JPMorgan Was Doing in Its London Office
Gambling on high-risk synthetic credit derivatives is not the only area of interest at JPMorgan’s Chief Investment Office (CIO) – the division that has thus far admitted to losing $6.2 billion in the London Whale debacle. According to Exhibit 81 released by the U.S. Senate’s Permanent Subcommittee on Investigations, Ina Drew, the head of the CIO, was also overseeing the investment of funds in the firm’s Bank Owned Life Insurance (BOLI) and Corporate Owned Life Insurance (COLI) plans – a scheme enshrined by the U.S. Congress in 2006 that allows too-big-to-fail banks as well as many other corporations to reap huge tax benefits by taking out life insurance policies on workers – even low wage workers – and naming the corporation the beneficiary of the death benefit.
Most Americans are unaware that for at least 25 years big business and banks have been secretly taking out millions of life insurance policies on their workers and naming the corporation the beneficiary of the death benefit without the knowledge of the employee. The individual policies are frequently in the hundreds of thousands of dollars and sometimes millions. To keep track of employees who have left the company, deaths are routinely tracked through the Social Security Administration. The policies became known as “dead peasant” or “janitor” policies because corporations took out life insurance on millions of low-wage workers, including janitors, without their knowledge or consent.
The insurance can give a nice boost to bottom-line corporate profits because it provides multiple tax breaks, including: the cash buildup in the policy is reported as income but is tax-exempt because it resides in a tax-sheltered life insurance policy; the cash payment the company receives when the employee dies is also tax-free under existing tax law.
In 2003, the General Accountability Office (GAO) released a study which found that multiple companies held policies on the same individual and that 3,209 banks and thrifts had current cash values in these policies totaling $56.3 billion. In 2006, Congress passed the Pension Protection Act. Instead of outlawing this dubious practice, Congress grandfathered all of the millions of previously issued policies while imposing a few tax and reporting rules.
A study by Susan Lorde Martin, Professor of Business Law at Hofstra University in Uniondale, New York found that Portland General, at the time a subsidiary of Enron, had created a COLI arrangement where the death of low-wage workers was funding lavish compensation plans for top executives.
Martin writes:
“About 75% of an estimated $80 million in benefits from the policies pays for a long-term compensation plan for managers, directors, and other top officers; the other twenty-five percent contributes to a supplemental executive retirement plan. Workers who have had their entire retirement funds of hundreds of thousands of dollars wiped out by Enron’s collapse were shocked to discover that their deaths will support benefit plans for top Enron executives.”
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May 14, 2013 at 4:11 PM
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BTW, I owe you big time for this DB...
"A study by Susan Lorde Martin, Professor of Business Law at Hofstra University in Uniondale, New York found that Portland General, at the time a subsidiary of Enron, had created a COLI arrangement where the death of low-wage workers was funding lavish compensation plans for top executives."
http://www.reuters.com/article/2013/07/17/us-jpmorgan-ferc-idUSBRE96G13820130717
[snip]
JPMorgan near settlement with energy regulator: WSJ
(Reuters) - JPMorgan Chase & Co (JPM.N) and the U.S. Federal Energy Regulatory Commission are close to reaching a settlement that could result in the bank making the largest payment ever to the U.S. energy market regulator, the Wall Street Journal reported on its website on Wednesday.
The amount to be paid is not yet known, but past discussions have involved close to $1 billion, the newspaper said, citing people familiar with the matter.
The two sides are exchanging drafts of a deal that would resolve allegations that the bank manipulated electricity markets in California and the Midwest, according to the report.
A JPMorgan spokesman declined to comment on the report.
A FERC spokesman declined to comment.
http://delawarebusinessdaily.com/2013/08/jpmorgan-in-bribery-probe-over-china-hiring-report/
JP Morgan Chase is being investigated by US authorities over claims the bank hired the children of influential Chinese officials to secure business in the country, the New York Times reported Saturday.
The Times reported on its website, citing a confidential United States government document, that a bribery investigation had been opened to study the allegations.
The paper cited one case where the bank hired the son of Tang Shuangning, a former Chinese banking regulator who was now chairman of the state-run China Everbright Group financial conglomerate.
The paper reported that JPMorgan secured a succession of sought-after deals from China Everbright after hiring the son, Tang Xiaoning.
The Times report said the Hong Kong office of JPMorgan had also hired the daughter of a Chinese railway official.
The official in question was later arrested in connection with a bribery scandal, according to the document cited by the Times.
JP Morgan Chase was caught in the spotlight yesterday after media reports suggested the bank hired sons and daughters of senior Chinese officials in the hope of winning deals from major state-owned enterprises.
The revelation of JP Morgan's hiring of the son of China Everbright Group's chairman and a former railway official's daughter comes at a sensitive time for Sino-US relations.
Tang Shuangning, a former Chinese banking regulator, is now chairman of the state-run China Everbright Group financial conglomerate. Photo: Xinhua
News of the investigation came ahead of state-owned China Everbright Bank's plan late this year to raise several billion US dollars in a Hong Kong listing. A dozen US and European investment banks, including JP Morgan, were competing for roles to underwrite Everbright Bank's IPO. China Everbright Group chairman Tang Shuangning is also the chairman of its subsidiary China Everbright Bank.
The New York Times reported on its website yesterday, citing a confidential US government document, that the US administration had opened an antibribery-related investigation into JP Morgan. Specifically, it was probing the bank's hiring of the son of Tang, who is a former top banking regulator before he became China Everbright Group chairman. The investigation would also look into the bank's hiring of the daughter of Zhang Shuguang , former deputy chief engineer of China's railways ministry, for the bank's Hong Kong office.
A JP Morgan spokeswoman told the South China Morning Post that the bank had already disclosed relevant matters in a regulatory filing on August 7. In the filing, the bank said it received "a request from the [US] SEC [Securities and Exchange Commission] Division of Enforcement seeking information and documents relating to, among other matters, the firm's employment of certain former employees in Hong Kong and its business relationships with certain clients." No names were mentioned in JP Morgan's August 7 filing.
"We are fully co-operating with regulators," the spokeswoman added without elaborating further.
The investigation did not surprise China's banking community. Some online readers described such practices as an "open secret and global practice" as many Western leaders' sons and daughters often went to top financial institutions. For example, Chelsea Clinton, the only child of former US president Bill Clinton, joined Avenue Capital Group, a US$12 billion hedge fund, in 2006 when she was 26.
Tang's son and Zhang's daughter were not alone. Industry sources told the Post that the daughter of Vice-Premier Wang Yang had worked for a major European investment bank for many years in Hong Kong. The daughter of Han Zheng used to work for Standard Chartered Bank in Shanghai, where her father was the city's top official.
"It is not at all unusual for investment banks to hire wellconnected people, including children of management of existing or potential clients, whether in China or in other countries," said David Webb, a former investment banker and now a well- known independent investor and analyst in Hong Kong.
"However, if there is an indirect kickback going on, for example, by paying a large bonus linked to the winning of business from the employee's father's company or the government, or even putting the child on the payroll without actually requiring him to work, then that could be corruption and should be investigated by the relevant authorities, including Hong Kong's ICAC if the offence took place here," Webb added.
http://www.reuters.com/article/2013/08/27/us-jpmorgan-whale-idUSBRE97Q0D620130827
(Reuters) - Former JPMorgan (JPM.N) employee Javier Martin-Artajo, who was arrested by Spanish police earlier on Monday in connection to a trading scandal at the bank, has been released from custody, according to a Spanish court source.
Martin-Artajo, who will not be allowed to leave Spain under the terms of his release and who will have to appear in court every 15 days, has told a Spanish court he is not willing to be extradited to the United States, the source said.
U.S. prosecutors brought criminal charges against him last month in relation to a trading scandal that cost JPMorgan $6.2 billion last year.
Spain's High Court, which normally decides on extradition cases, has taken on his case, police said earlier.
http://mobile.reuters.com/article/topNews/idUSBRE97Q0YE20130827?irpc=932
(Reuters) - U.S. government housing finance authorities are pressing JPMorgan Chase & Co for at least $6 billion to settle lawsuits over bonds backed by subprime mortgages, according to a person familiar with the matter.
The company is arguing that it should pay less to settle the claims by the U.S. Federal Housing Finance Agency, according to the source, who was not authorized to speak for attribution.
The FHFA litigation is among a raft of legal issues JPMorgan is trying to work through in addition to investigations over its $6.2 billion "London Whale" derivatives loss of last year.
An FHFA spokeswoman declined to comment.
The state is investigating why JPMorgan Chase waited three months to tell officials that personal information of more than 1,300 residents could be compromised.
http://www.onlinesentinel.com/news/Mainers_who_collected_unemployment_may_have_had_information_compromised_.html
http://www.cnn.com/2015/12/05/us/miami-beach-police-shooting/index.html
john