The bottom of the barrel ethics of big banks appear to have reached new lows, as evidenced by a recent confidential government investigation of JP Morgan. It was uncovered by The New York Times and alleges schemes designed to manipulate the country’s energy markets.
Our Miami foreclosure lawyers understand that possible sanctions are being weighed by the Office of the Comptroller of the Currency, which further alleges that bank administrators were not only complicit in what was happening, but at least one is believed to have lied about it under oath.
JP Morgan is the nation’s biggest bank, and is currently being investigated by no fewer than eight federal regulatory agencies on a number of fronts. Previously viewed as a “model citizen” in the banking world, JP Morgan has proven itself no different when it came to the scandals that plagued other lenders in the midst of the housing crisis – and no apparently in many other arenas as well.
It doesn’t seem any real consequences are on the horizon, as the bank is continuing to experience some of its highest ever earnings this quarter, with record profits tabulated over the last several.
The enforcement staff with the Federal Energy Regulatory Commission, also known as FERC, has indicated that it will likely pursue some kind of penalty against the firm over its energy trading activities in the electric markets of both Michigan and California. Allegedly, traders offered to sell the energy at prices that were misrepresented to appear attractive, when they actually were not.
Another branch of the investigation involves the firm’s integral role in the creation of something called credit default swaps. This is a type of agreement in which the seller of a swap compensates the buyer if there is a default. The problem was that many of these CDSs were purchased by anyone and everyone, even when they had no direct insurable interest in the loan. There are referred to as naked CDSs. So the payment ultimately received when the loan defaulted was far less than whas the original loss of the loan. These transactions require no government oversight, and this lack of transparency was reportedly part of the reason this country landed in a recession.
For this, the bank and the executive in question could both be heavily fined.
In addition to this action, the co-chief operating officer who had been in charge of cleaning house in the firm’s mortgage division following the housing bubble collapse has announced his departure.
There is also another investigation into the firm’s credit card collection efforts, which reportedly involved a heavy reliance on faulty documents. Allegedly, the bank has been routinely suing delinquent customers on the basis of inaccurate records – and there is evidence they knew those records were inaccurate. (Sounds like a familiar modus operandi to our foreclosure attorneys.)
In yet a separate investigation, there is apparently evidence that the bank failed to adhere to federal law in reporting suspicious transactions as it pertains to ponzi scheme felon Bernie Madoff. That case, regulators say, revealed a host of recurring problems at the firm, which has taken on a combative approach when it comes to federal regulators.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
JPMorgan Caught in Swirl of Regulatory Woes, May 2, 2013, By Jessica Silver-Greenberg and Ben Protess, New York Times DealBook
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