EDITOR NOTE: We’ve been covering JPMorgan Chase regulatory violations for years, our focus often pointed at their manipulation of the metals market, for which they were charged and fined (finally!) in 2019. Apparently, the “smart money,” namely Warren Buffett and George Soros, have had enough of JPM. In their latest 13F filings, Berkshire Hathaway has dumped around 50% of its JPM holdings; Soros Fund Management LLC dumped all of their holdings. A moral or financial decision? Not entirely clear. But JPM’s violations certainly are, and most are listed in the article below.
According to the 13F filing that Warren Buffett’s Berkshire Hathaway made with the Securities and Exchange Commission for the quarter ending December 31, 2019, it held 59.5 million shares of JPMorgan Chase with a total value at that time of $8.29 billion. By June 30 of this year, that position had been trimmed by more than half, to 22.2 million shares. By September 30, one day after JPMorgan Chase had just admitted to its fourth and fifth felony count in the past six years, brought by the U.S. Department of Justice, Berkshire Hathaway’s position in JPMorgan Chase tallied up to just under 1 million shares, a 98 percent reduction from the beginning of the year, according to the SEC filing Berkshire Hathaway made on Monday.
And it’s not like Buffett is simply getting out of all big bank stocks. According to the same 13F filing for September 30, Berkshire Hathaway still held a whopping $24 billion in Bank of America stock; $4.7 billion in U.S. Bancorp; $3 billion in Wells Fargo; and $2.5 billion in Bank of New York Mellon.
Jamie Dimon has served as Chairman and CEO of JPMorgan Chase during all five felony counts as well as a much broader crime spree that has resulted in fines and settlements of more than $37 billion. The bank has been charged with rigging everything from electricity markets in the U.S. to interest rate benchmarks in Europe to foreign currency, precious metals, and even the U.S. Treasury market. (See detailed rap sheet below.) Despite a rap sheet that rivals organized crime, the Board of Directors of JPMorgan Chase has stuck with Dimon to sit at the helm of what is now the largest federally-insured bank in the United States.
Now the smart money seems to be saying it’s had enough. In addition to Buffett’s Berkshire Hathaway, George Soros’ investment arm, Soros Fund Management LLC has dumped all of its shares of JPMorgan Chase according to its 13F filing of September 30. That compares with the 258,252 shares it owned on June 30, 2020.
JPMorgan Chase’s Rap Sheet
(This Is Not a Complete List)
April 21, 2011, JPMorgan Chase agreed to settle a civil lawsuit and pay $56 million to settle claims that it overcharged members of the military service on their mortgages in violation of the Service Members Civil Relief Act and the Housing and Economic Recovery Act of 2008.
February 7, 2012, JPMorgan Chase agreed to pay $110 million to settle consumer litigation that claimed it overcharged customers for overdraft fees.
February 9, 2012, JPMorgan Chase reaches an agreement with the OCC to pay $113 million for unsafe and unsound mortgage servicing and foreclosure practices.
August 10, 2012, JPMorgan Chase agreed to pay $1.2 billion to settle claims that it, along with other banks, conspired to set the price of credit and debit card fees.
November 16, 2012, JPMorgan Chase agreed to pay $296.9 million to the SEC to settle claims that it misstated information about the delinquency status of its residential mortgage portfolio.
July 2013, a unit of JPMorgan Chase agreed to pay $410 million to the Federal Energy Regulatory Commission to settle claims of bidding manipulation of California and Midwest electricity markets.
September 19, 2013, JPMorgan Chase agreed to pay $80 million in combined fines to the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) and $309 million in refunds to customers whom the bank billed for credit monitoring services that the bank never provided.
September 19, 2013, JPMorgan Chase agreed to pay $920 million to U.S. and U.K. regulators for its unsafe and unsound banking practices in using bank depositors’ money to trade in derivatives in London. It lost at least $6.2 billion in the trades. This was known as the “London Whale” scandal.
November 15, 2013, JPMorgan Chase announced that it had agreed to pay $4.5 billion to settle claims by private investors that it defrauded them in mortgage-backed securities.
November 19, 2013, JPMorgan agreed to pay $13 billion to settle claims by the Department of Justice; the FDIC; the Federal Housing Finance Agency; and various State Attorneys General over its fraudulent practices with respect to mortgage-backed securities. JPMorgan acknowledged it made serious misrepresentations to the public.
December 4, 2013, JPMorgan Chase agreed to pay 79.9 million Euros to settle claims of the European Commission relating to illegal rigging of benchmark interest rates.
In December 2013, JPMorgan Chase agreed to pay $22.1 million to settle claims that the bank imposed expensive and unnecessary flood insurance on homeowners whose mortgages the bank serviced.
January 7, 2014 the U.S. Department of Justice charged JPMorgan Chase with two criminal counts for its banking conduct in the Bernard Madoff Ponzi scheme. The bank admitted to the charges; agreed to pay $1.7 billion to a Madoff victim fund and agreed to a Deferred Prosecution Agreement.
May 20, 2015, JPMorgan Chase pleaded guilty to one criminal count brought by the U.S. Department of Justice for its role with other banks in rigging the foreign exchange market. The bank agreed to a fine of $550 million.
December 18, 2015 the bank agreed to charges by the SEC that it had steered its customers into in-house products where it reaped higher profits without disclosing this conflict to the customer. It paid $267 million to settle these charges.
On January 20, 2017 JPMorgan Chase agreed to pay $53 million to settle charges that it had discriminated against minority borrowers by charging them more for a mortgage than white customers.
October 2018 JPMorgan Chase agreed to pay $5.3 million to settle U.S. Treasury allegations that “it violated Cuban Assets Control Regulations, Iranian sanctions and Weapons of Mass Destruction sanctions 87 times,” according to Reuters.
December 26, 2018 JPMorgan Chase settled claims with the SEC for $135 million over charges that it had improperly handled thousands of transactions involving the shares of foreign companies.
May 16, 2019, JPMorgan Chase settled charges for 228.8 million Euros with the European Commission that it rigged the foreign exchange market. (Other banks were also fined.)
September 16, 2019, the U.S. Department of Justice indicts two current and one former precious metals traders at JPMorgan Chase for turning the precious metals desk at the bank into a “racketeering” enterprise.
September 29, 2020, the U.S. Department of Justice brings two counts of wire fraud against JPMorgan Chase involving “tens of thousands of episodes of unlawful trading in the markets for precious metals futures contracts, and the second involving thousands of episodes of unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds.” The bank admits to the charges and agrees to pay $920 million in fines and restitution to various regulators. It is, once again, put on a three-year probation.
Originally posted on Wall Street on Parade