Courtesy of Pam Martens.
Too-big-to-fail Wall Street mega banks are now one part bank, one part legal defense and one part confidence-game.
JPMorgan’s Chairman and CEO, Jamie Dimon, whose career has now survived more scandals in the past two years than most business titans ever see in a lifetime, has penned a masterful 32-page head-fake to shareholders.
Dimon tells shareholders that the company has “consistently shown good financial performance” while distancing himself from the $30 billion the company has paid out in fines and settlements for a rash of misdeeds since January 2013. The word “fortress” appears five times in the letter with the oft-expressed “fortress balance sheet” morphing additionally into the “fortress control system” and the “fortress company.” Dimon’s photo appears alongside the letter, clad in a navy jacket and blue shirt. Next year he might want to complete the fortress analogy by donning a Knight’s metal armor.
Dimon says the year was “marred by significant legal settlements largely related to mortgages.” In fact, just 7 days after the 2013 fiscal year ended, JPMorgan paid $2 billion and made history in being the first Wall Street mega bank to be charged with two felony counts and receive a deferred prosecution agreement. The matter had nothing to do with mortgages. The bank was charged with aiding and abetting the Madoff fraud – the largest Ponzi scheme in the history of modern finance.
In September of last year, JPMorgan settled its London Whale fiasco for $920 million in penalties. That had nothing to do with mortgages either. It involved using insured deposits from its commercial bank to gamble in exotic derivatives in London; hide the losses from its shareholders initially and then misstate the amount of the losses to regulators. Early on when the press got wind of the matter, Dimon called it a “tempest in a teapot.” The losses totaled at least $6.2 billion when the company stopped reporting them.
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