The CEO of JPMorgan Chase & Co. has joined the billionaire club, according to the most recent report by Bloomberg News.
Jamie Dimon, the assembler of Citigroup Inc. and now head of JPMorgan, has a net worth of $1.1 billion, derived primarily from a $485 million stake in the bank where he has been a chief executive officer since 2005. His investment portfolio was seeded by the profits he incurred from sales of Citigroup stock.
While many media outlets have been heralding his “unconventional” path to billionaire-hood by noting he didn’t take the track of most billionaires (who start businesses or head investment funds), it’s worth noting Dimon’s success was built on the backs of consumers, homeowners and taxpayers. Neither he nor his company suffered any significant losses as a result of their role in creating the financial crisis that nearly led America into another Great Depression.
Two years ago, the U.S. Justice Department announced a $13 billion civil settlement with the financial giant, which was to be considered “restitution” for the bank engaging in actions that directly help to plunge the nation into a recession. Specifically, this company (among others) aggressively pushed high-rate mortgages on people who could not afford them. They skirted the laws to ensure they could push through paperwork to secure those loans. And then, knowing those mortgages were at high risk of foreclosure, they still bundled them together and sold them as packages to investors.
And then, of course, when a flood of defaults and foreclosures began pouring in, it wasn’t JPMorgan that was left with the price tag.
Certainly, JPMorgan wasn’t the only firm engaging in this shady – and sometimes outright illegal – conduct. However, the size of this company meant the scope of the damage was enormous. Pension funds were devastated. Investors were left penniless. Borrowers were left homeless, their credit in shambles.
The settlement was accompanied by a “statement of fact” in which the bank conceded its employees were well aware mortgages sold failed to comply with standard underwriting rules and that they were intentionally misleading investors by selling bundled mortgages that weren’t fit for sale.
And while $13 billion may seem like a stiff penalty, it’s little considering the firm held $2.4 trillion in assets. This $13 billion was basically a drop in the bucket and had no impact whatsoever on daily operations, and what’s more, the settlement was actually only for $9 billion, as $4 billion was an “accounting falsehood.” Neither did the settlement have an impact on Dimon, who has been regularly bringing in an annual $20 million paycheck throughout the crisis.
The settlement did not technically release any individual from within the bank from criminal charges, but to date, that has not happened. In fact, as Matt Taibbi, a Rolling Stone reporter who tenaciously covered the housing crisis, reported in a 6,000-word article, it took just one phone call from Dimon to then-U.S. Attorney General Eric Holder’s Office to ward off any criminal charges in lieu of the settlement.
So while many are lauding Dimon’s business acumen in acquiring wealth beyond the $1 billion mark, there are many who have little reason to celebrate.
If you’re battling debt collection 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 Tuesday at 6 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.
Jamie Dimon Is Now a Billionaire, and He Got There in an Unusual Way, June 3, 2015, By Hugh Son and Pamela Roux, Bloomberg Business
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Judge: Banks Broke the Law, Caused Financial Collapse, May 24, 2015, Miami Foreclosure Defense Attorney Blog