There was a time when Jamie Dimon liked everyone to believe that his JP Morgan had a “fortress balance sheet”, that he was disgusted when the US government “forced” a bailout on it, and that no matter what the market threw its way it would be just fine, thanks. Then the London Whale came, saw, and promptly blew up the “fortress” lie.
But while JPM’s precarious balance sheet was no surprise to anyone (holding over $50 trillion in gross notional derivatives will make fragile fools of the best of us), what has become a bigger problem for Dimon is that slowly but surely JPM has not only become a bigger litigation magnet than Bank of America, but questions are now emerging if all of the firm’s recent success wasn’t merely due to crime. Crime of the kind that “nobody accepts or denies guilt” of course – i.e., completely victimless. Except for all the fines and settlements.
Here is a summary of JPM’s recent exorbitant and seemingly endless fines. Courtesy of the Daily Beast:
Date: April 2011
Amount: $56 million
Behavior: JPMorgan was one of several banks called out in a class-action lawsuit for overcharging or wrongfully foreclosing on active-duty military personnel. The company apologized, paid out $27 million in cash, cut interest rates on home loans and returned houses that were wrongfully foreclosed upon.
Date: June 2011
Amount: $153.6 million
Behavior: The Securities and Exchange Commission sued JPMorgan for misleading buyers by allegedly failing to inform investors that a hedge fund assisted in picking and betting against securities in a collateralized debt obligation JPMorgan had sold in 2007. JPMorgan paid $153.6 million to settle the charges without admitting or denying the allegations.