RSS Feed
Twitter
Facebook
Email
HomeJPM – Madoff Laundromat “Cleans” Empty Suits
Posted by Larry Doyle on January 15, 2013 9:20 AM |
If a cop were to a issue a challenge (perhaps even a threat), and an organization calls the cop’s bluff and beats him like a drum in the process, what does that say about the cop, the organization, and the activity in question? To what do I allude?
Well, let’s say for example, a criminal uses a laundromat for the purpose of facilitating his “business” but the laundromat is not held to proper account. Did the “business activity” ever really occur there? Did the cops ever fully and properly investigate and enforce their duty to uphold the law?
Not that Americans are not already fully aware of the charades being played out in the world of financial regulation and oversight but the latest iteration really takes the cake. To what do I refer?
Let’s connect the dots in regard to the money laundering widely recognized as facilitated by JP Morgan for the benefit of Bernie Madoff’s longstanding scam.
On January 4th, Bloomberg reported and I highlighted the fact that JP Morgan Faces Sanctions for Withholding Madoff Documents,
The U.S. Treasury Department’s inspector general has threatened to punish JPMorgan Chase & Co. (JPM) for failing to turn over documents to regulators investigating the bank’s ties to Bernard Madoff’s Ponzi scheme.
Inspector General Eric Thorson gave the largest U.S. bank a Jan. 11 deadline to cooperate with the Office of the Comptroller of the Currency probe or risk sanctions for impeding the agency’s oversight.
U.S. Treasury? Office of the Comptroller of the Currency? I mean, we are calling out the cavalry here.
What day is it? Tuesday January 15th so that deadline of the 11th has come and gone.
Did JPM play ball and provide the documents in regard to its laundering activities that aided and abetted the Madoff scam? Well, we certainly do not find any meaningful reporting or questioning of bank officials or the cavalry by our major financial periodicals. But we do see buried under the cover of a WSJ story addressing failures within JPM’s risk management – - – or lack thereof – - – the following,
One set of cease-and-desist orders from the Office of the Comptroller of the Currency and the Federal Reserve instructs the largest U.S. bank by assets to remedy the breakdowns that allowed a small group of London-based traders to rack up more than $6 billion in losses last year.
This story is a virtual non-event if not an outright cover for JPM’s laundering activities with Madoff. What about that?
The money-laundering actions from the Fed and OCC don’t specify an incident that prompted them. The OCC said it discovered an “inadequate system of internal controls,” saying “the bank didn’t develop adequate due diligence on customers, particularly in the commercial and business banking unit” and failed to file all necessary reports of suspicious activity.
None of the orders issued Monday require any fines or monetary penalties, but regulators left the door open to future action.
So on January 4th or thereabouts the OCC issues what might largely be defined as a challenge if not a threat to JPM to be answered by the bank by the 11th.
The 11th comes and goes. Then on the 14th, we see these actions — if we can call them that — taken by the Fed and the OCC.
What a joke.
Can you imagine being an executive of the Treasury, Fed, or OCC now trying to go back into JPM or any other large bank? How might that executive be viewed upon exiting the bank? Empty suits, perhaps? Once the members of the cavalry exit the bank, I can only imagine the JPM bankers engaging in a practice defined to me by my children as “ROFLMAO.”
Crime pays and once again, “justice neglected is justice denied.”
Do the financial cavalry think the American public is not wise to these charades?
Navigate accordingly.
Larry Doyle
Isn’t it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.
I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.
http://www.sec.gov/news/studies/2009/oig-509/exhibit-0526.pdf
How is it that the above 2001 emails were never examined in the SEC OIG comprehensive 400+ page investigation of Madoff?
Furthermore, how is it that the WSJ, NYT, never published the damming emails between Cutler and Richardson?
How is it that I am the only one that has ever posted the emails?
Why has JP Morgan refused to turn over to federal authorities Madoff personal checking account?
Madoff paid himself and others through this account with hand written checks from the proceeds of his ill-gotten gains. Madoff’s hand written checks certainly could have foretold of the imminent collapse of the Ponzi scheme.
How is it the JP Morgan, who invested $250,000,000 with Madoff through feeder funds at the same time Stephen Cutler (the former SEC Enforcement Director) became JP Morgan’s top lawyer, was able to escape the fall of Madoff right before the collapse of the Ponzi scheme late in 2008?
JP Morgan was the only institutional investor that got out of the Madoff scam just in the nick of time – removing JP Morgan’s now $276,000,000 exposure to Madoff.
A $26,000,000 profit I might add!
What dirt does the former SEC Enforcement director have on others that keeps all authorities at bay?
Blackmail is a lecherous tool of Wall Street.
“What Are The Odds” that one of Cutler’s past misdeeds will be his undoing?
When Khuzami leaves – I begin. I have been hoping and praying it would not come to this – hells bells.
When was I first introduced to SEC Enforcement Director Stephen M. Cutler? Well lets just the initial introduction was one way!
The very first thing I was asked to verify in my deposition with the Securities and Exchange Commission’s Office of Investigator General in February of 2009 was the email I sent to the previous SEC-OIG in January of 2003.
The email to the SEC OIG and a corresponding phone call made by me to the SEC in January 2003, both communications describing the massive short-term trading of mutual funds by preferred investors taking place at my firm, was the very reason for the SEC to begin a four month long “routine regulatory review” beginning that same month – January 2003 (wink,wink).
The Globe article linked should be a good read for those parties that may be interested.
One question you should ask yourself after reading the reaction of the ex-regulators and others being quoted regarding the incomplete chronology of events reported in “SEC missed a chance in its probe of Putnam.”
What would those individuals quoted think if it had been reported that in fact an identified whistle-blower contacted the SEC by both email, and a call, to report the activity and all of a sudden a four month long “routine regulatory review” takes place.
How did the SEC “routine regulatory review” turn out?
A big thumbs up for the reviewed?
SEC Missed A Chance in Its Probe of Putnam
From 2004. Nine years ago. Let’s try to get it right this time….
JP Morgan Is Facing Heat of Patriot Act
At one point, prosecutors contended that a senior Chase official lied to a state regulator to cover for Beacon Hill. After Beacon Hill’s lawyer told state banking officials at a meeting in January 2001 that XYZ planned to bank at Chase, a Banking Department lawyer, Sara Kelsey, followed up with Chase’s compliance chief, Greg Meredith. Mr. Meredith “deceitfully confirmed that the business was not yet in operation,” according to grand-jury minutes described in a memorandum of law submitted by Mr. Morgenthau on Oct. 21, 2003, as part of the Beacon Hill case. Mr. Meredith told Beacon Hill it would have to hire an outside consultant to review its regulatory compliance, according to a filing by prosecutors. Although Chase wanted an audit of Beacon Hill, its owner, Anibal Contreras, restricted the outside consultant to a review of its policies and procedures, the filing said.
Mr. Meredith didn’t return a call, and a J.P. Morgan Chase spokeswoman said he wouldn’t have any comment. Mr. Meredith no longer serves as the bank’s head of compliance, according to one person familiar with the bank, in part owing to his failure to take more aggressive action in dealing with Beacon Hill.
Regulators Should Take Off Kid Gloves