FBI launches JPMorgan probe, shareholders back Dimon

[MindMover]

Source: Reuters

(Reuters) - The FBI has opened a probe into trading losses at JPMorgan Chase & Co, stepping up the pressure on the bank after the U.S. Securities and Exchange Commission and the Federal Reserve said they were also looking into the wrong-way bets that led to the losses.

Yet at the same time, shareholders backed embattled Chief Executive Jamie Dimon at the bank's annual shareholders meeting in Tampa, Florida on Tuesday, voting against a proposal to split the jobs of CEO and chairman.

Though shareholders mostly gave Dimon a pass, pressure mounted on the bank to reclaim some of the millions of dollars it paid to the executives who oversaw the trades. Dimon said JPMorgan would pursue more disciplinary action against those who were responsible.

"We will do the right thing. That may well include clawbacks," he told reporters after the annual meeting.

The timing on any such move was not clear, though, and the various regulatory probes could add complications. A source familiar with the FBI investigation, opened by the agency's New York office, described it as being at a preliminary stage.

The probe was seen in some quarters as necessary, given the ongoing debate in Washington about bank regulation and reform, and one expert said it raised the level of concern around what happened.

"The FBI looks for evidence of crimes and goes after people who it alleges are criminals. They want to send people to jail. The SEC pursues all sorts of wrongdoing, imposes fines and is half as scary as the FBI," said Erik Gordon, a professor in the law and business schools at the University of Michigan.

Read more: http://uk.reuters.com/article/2012/05/15/uk-jpmorgan-idUKBRE84E06920120515

[Pachamama]

1. As a shareholder and a Chase Mortgage holder, I have this question for Jamie Dimon: Why is it that

....when I approached Chase to refinance my 1st & 2nd Mortgage into a lower interest jumbo rate that would have reduced our monthly payments by 25% and we have always paid on time, have a credit rating between 760-800 and have never declared bancrupcy or foreclosed on a property or been in default, would they have said they couldnt because they tightened their income to debt ratio, yet they were perfectly ok with this "silly" (Dimon's description) of these risky trades that lost $2Billion+????

WTF?????

[MindMover]

3. Like an addicted gambler at the table.....

has plenty of money to gamble but does not have enough to share with anyone else......

The Worlds Bankers have all the money they can gamble with at the table literally given to them by our governments.....

and if you have ever asked money from an addicted gambler, you know that hollow look in their eyes....

[Pachamama]

4. Interesting analogy....

I look at our situation and I came to the realization that if we couldnt refinance (good income, lots of equity and house is located in a very good area that the lowest price house is over $1.8MM and very low available inventory, area where lots of CEOs and yes, bankers and VC's themselves all live....aka a 1% neighborhood with only one property that foreclosed in last 10 yrs and only 2 short sales) then no one can qualify in this country except the ueber rich! The ultimate insult to injury was when they said we needed more income....but only about $12k more a yr....and yet ironically, if they had refinanced, we would have reduced our mortgage payments by as much as $24k a year.... (Yes, Im embaressed to admit that we have a mortgage exceeding $8k monthly....

Even more infuriating: the bank itself is the one who 7 years ago when we had a devastating flood necessatating a 2nd mortgage in order to rebuild our house....the bank was ohhhh so happy to give us that 2nd mortgage at 7.5%!!! Now we have a better built house (less risk for them and improved value) yet even as our income is higher, their "new criteria" wont allow us to refinance the 1st and 2nd mortgage into a monthly mortgage reduced by 25% in terms of payment! From an $8K a month payment to a $6k a month mortgage payment. They would have made money on points and extended the years of payments and interest made. They would have made us happy customers with $24k more a year in our pockets ($36k income annually -money that could go into our savings, the economy). They even would have helped ensure that the likelihood of there ever being a default on our part would be lessened. It could have been a win-win for all...yet no, Chase considered it "too risky"....

But their other gambles????? Wow.....we as a Nation and the recovery of our economy is really effed until our priorities and the regulations of these banks and the rights of consumers and homeowners are changed....

[MindMover]

13. I would start shopping banks......

and you do not have to be embarrassed for being successful.... your family has probably worked hard to acquire the American dream and now see it as a potential albatross.....

I once had a mortgage of over 4k monthly many years ago when 4k was a lot of money......personally got sick of acquiring and sold or gave it all away and have been renting ever since.....

I now have the freedom to move whenever wherever, and find this condition I am in to be absolutely marvelous.....

As for these to big to fail banks, I say they are not too big to fail.....as you will start seeing very soon....

[tularetom]

2. It wasn't ALL the shareholders who gave him a pass

I sure as hell didn't.

Of course I guess my 100 shares were sort of lost among the millions of shares owned by big financial players who voted for this POS to get a raise and keep fucking up the company.

[obxhead]

6. Yes, I'm betting if you looked at the vote

you would find that a majority of shareholders voted against him, but the few 1%ers that own large quantities of the stock had enough voting power to keep him.

[Turbineguy]

9. 60% of the shares voted it down

40% were in favor.

[AllyCat]

5. They will do the right thing for their wallets, that's for sure

The right thing in the order of the world? Don't hold your breath.

[benld74]

7. There HAD to be something behind splitting CEO and chairman jobs

to make them vote it down!? Anyone know for sure? any shareholders?

[citizen blues]

8. That 2 Billion dollar loss is FDIC insured!!!!

Remember this headline from last fall?

HOLY BAILOUT - Federal Reserve Now Backstopping $75 Trillion Of Bank Of America's Derivatives Trades

You can read the full article at:

http://dailybail.com/home/holy-bailout-federal-reserve-now-backstopping-75-trillion-of.html


There had better be a goddamned investigation!!!! And Jamie Dimon's ass behind bars!

BREAK UP THE FUCKING BANKS!!!!!

[dixiegrrrrl]

12. dimon is head of JP Morgan, not BOA...

Is there any evidence that JP Morgan had enormous back stopping by FDIC?
FDIC usually steps in when banks go under.
JP Morgan is not ( so far) going under.

[citizen blues]

14. Yes, there is.....

From the article I posted:

"This is a direct transfer of risk to the taxpayer done by the bank without approval by regulators and without public input. You will also read below that JP Morgan is apparently doing the same thing with $79 trillion of notional derivatives guaranteed by the FDIC and Federal Reserve."

No, this may not have threatened the overall soundness of this particular bank - this time. The illness may not have killed the patient, but the disease goes merrily on.

The banks want to have their cake and eat it too. They want to continue gambling with depositors' money in one risky, high-stakes crap shoot after another. They pay lip service to "market corrections" but the reality is far from a free market economy. The banks are continuing to pocket their wins and socialize their losses. Wonderful racket for Jamie Dimon and his ilk, but the American taxpayer is still being told to bend over.

One problem - One solution! BREAK UP THE BANKS!

[FBaggins]

15. You've mistaken what is "backstopped".

Take the example of a mutual fund that you hold with a brokerage. That account is "backstopped" by the SIPC. You won't lose your investment if the brokerage goes belly-up. But the SIPC doesn't guarantee the performance of investment. You absolutely can lose money.

In the case you reference, the government guarantees that the derivatives won't disappear into thin air if BofA goes belly-up. They don't guarantee the performance of the derivative. So if JPM invests in a derivative that's designed to go up five times as fast as interest rates go down... but interest rates go up instead... they lose their shirts (and the government is not on the hook for a new shirt). Nobody is saying that a counterparty went bankrupt and failed to fulfill their part of the deal... JPM purchased specific derivatives and they behaved in exactly the fashion they were designed to.

The real mistake here is that these options are supposed to be used by JPM to reduce the risk in their portfolio. If they lost 2 Billion on the one hand, it should have been offset by a comparable gain in their primary portfolio. Since that reportedly didn't happen (or we wouldn't have heard of this at all), that means that someone was making a "bet"... which some banks do, but JPM wasn't thought to be.

[dixiegrrrrl]

16. ahhh.. missed that..

thank you for pointing it out.

[Dont call me Shirley]

10. Demon and his handful of hacks STOLE the money.

This is the way they roll, the bankster criminals.

[WillyT]

11. K & R !!!

[Trillo]

17. Does the FBI have sufficient jurisdiction?

I believe JPMorganChase is a transnational corporation. Isn't the FBI's jurisdiction limited to the U.S.?

[LetTimmySmoke]

18. Oh shit.

[Amster Dan]

19. Dimon is a Grifter's Best Friend