JPMorgan Audit Director Laban Jackson: 'We Actually Are Guilty'

Sorry just isn't enough.

CHICAGO (Reuters) - The head of JPMorgan Chase & Co's audit committee acknowledged on Thursday that the bank had made mistakes and said it has tried to learn from them.
"We've got these things that we actually are guilty of and we've got to fix them," said Laban Jackson, the head of the audit committee of JPMorgan's board of directors.
"It's embarrassing for the board," he added. Jackson spoke at a conference at a downtown Chicago hotel on Thursday.
The remarks could underscore the bank's eagerness to resolve the raft of regulatory investigations it now faces. Earlier on Thursday, JPMorgan Chief Executive Jamie Dimon met with U.S. Attorney General Eric Holder in Washington to discuss a settlement to end investigations into its sales of shoddy mortgage securities leading up to the financial crisis.
In Chicago, Jackson spoke publicly with Anne Sheehan, chair of the Council of Institutional Investors, which sponsored the event.
Jackson did not discuss in detail the bank's settlement talks with regulators.
But he did offer a picture of some board decision making and vowed that it would try to become more open with investors. When Sheehan, as moderator, suggested that many directors would not share the same goal, Jackson replied, "That's got to change, and you guys have to drive it."

Asked what he learned from JPMorgan's troubles, Jackson said that while few boards or managers could stop malfeasance, JPMorgan made sure its response to problems like the so-called "London whale" trading losses were correct, such as by bringing in law firms to investigate its actions.
Jackson quoted JPMorgan's top director, former Exxon Mobil CEO Lee Raymond, as saying: "our job is to get the respect back in the market."
Jackson received a polite reception from attendees at the conference, which included hundreds of officials from state pension funds, endowments and other institutions.
Several said, however, they wished the directors had taken a harder line. "I think he was very light on the board's self-evaluation," said Dieter Waizenegger, executive director of CtW Investment Group, an adviser to union pension funds. CtW previously had opposed Jackson's re-election to the board.
Jackson noted that after problems emerged, JPMorgan had clawed back millions of dollars from executives, demoted some and fired others to send a strong message the bank's rules and culture had to be respected.
"I don't know what else we could have done because we're not allowed to shoot people," Jackson said. "That's what happened. I'm sorry to all you shareholders."

JPMorgan: We're Being Investigated By DOJ Over Mortgages

Hopefully the DOJ will dig into Washington Mutual and Long Beach Mortgage files as well. The truth needs to come out.

(Reuters) - JPMorgan Chase & Co, the biggest U.S. bank by assets, said on Wednesday it is being investigated by civil and criminal divisions of the U.S. Department of Justice over offerings of mortgage-backed securities.
The civil division gave the company a notice in May that it had preliminarily concluded that the firm violated federal securities laws in offerings of subprime and Alt-A residential mortgage securities during 2005 to 2007, JPMorgan said.
The company made the disclosures in a quarterly filing with the Securities and Exchange Commission.
JPMorgan also raised its estimate of possible legal losses in excess of reserves to $6.8 billion at the end of June from $6 billion three months earlier.

Senators Ask Why JPMorgan Execs Won't Be Punished

Senators Ask Why JPMorgan Execs Won't Be Punished For Involvement In FERC Investigation 

 

US Senator Elizabeth Warren ,D-MA, speaks at a press conference April 16, 2013 in Boston, Massachusetts, in the aftermath of two explosions that struck near the finish line of the Boston Marathon April 15. The number of casualties in a Monday's bombings at the Boston marathon has risen to 176, police said Tuesday. Three people were killed. AFP PHOTO/Stan HONDA (Photo credit should read STAN

WASHINGTON (Reuters) - Two Democratic Senators on Wednesday asked U.S. energy regulators for more details on how terms of a settlement were reached on alleged power market manipulation in California and the Midwest by a unit of JPMorgan Chase & Co.
In a letter to the head of the Federal Energy Regulatory Commission (FERC), Elizabeth Warren and Edward Markey, both of Massachusetts, questioned whether the settlement announced on Tuesday included "adequate refunds to defrauded ratepayers."
They also asked FERC why certain JPMorgan executives "who sought to impede the commission's investigation" will not be punished.

 

JPMorgan Chase Fires Back At Warren-McCain Plan To Reinstate Glass-Steagall

WOW , WHO IS SURPRISED AT THIS ONE .. TAKE THEM DOWN SENATOR WARREN!

Shocking news: JPMorgan Chase is not exactly jazzed about some recent plans to regulate banks, including Elizabeth Warren and John McCain's bill to reinstate the Glass-Steagall law splitting investment and commercial banks.
Even more shocking: JPMorgan seems to think it will probably be able to water down or avoid these plans.
In a Friday conference call to discuss the bank's second-quarter profits, an analyst asked whether the Warren-McCain bill to reinstate the Depression-era Glass-Steagall law would hurt business at the biggest U.S. bank by assets. JPMorgan's chief financial officer, Marianne Lake, dismissed the whole idea.
"Glass-Steagall didn't have anything to do with the crisis," Lake said, "and our business model allowed us to be a port in the storm. Our customers like doing business with us in the model we have now, so ..." She trailed off, took a long pause, and then added: "We don't spend time thinking about that."
In another not-exactly-stunning development, JPMorgan CEO and Chairman Jamie Dimon grumbled just a bit about new rules proposed by U.S. regulators this week limiting how much risk big U.S. banks will be allowed to take on. Specifically, he grumbled about how those rules are stricter than proposed global rules, and how that gap could make U.S. banks less competitive.
"If you have a world where some businesses have to have two times as much capital as other companies, over time that can create a huge competitive disadvantage," Dimon said. "We have interest in a safe and sound system, but not for a hugely imbalanced competitive playing field."
But Dimon also suggested that regulators are aware of these discrepancies and are trying to "harmonize" their efforts -- and who doesn't love harmony, especially when it makes it easier for banks to get more leveraged and dangerous?

Similarly, Lake suggested there were "fundamental issues" with proposed new rules limiting banks' riskiness and forcing them to seek out more capital. She suggested that regulators seem to be willing to consider having mercy on the banks and loosening up some of those fetters.
What is ironic is that the new capital and leverage proposals don't seem to create all that much of a hardship for banks, at least not for JPMorgan -- as DealBreaker's Matt Levine points out, the bank admits that about the worst that might happen is that it will not be able to shovel cash out the door to shareholders quite as quickly as it had hoped. Not exactly the econopocalypse bank flaks are predicting.
Anyway, seeing regulators back down on these rules would hardly be shocking. We have already seen aggressive bank lobbyists water down, muddle and delay implementation of the Dodd-Frank financial reform law. JPMorgan alone spent $8 million last year lobbying on financial reform and other issues, according to the Center for Responsive Politics.
As for the Glass-Steagall revival, the consensus on Wall Street and in Washington is that it stands pretty much no chance of becoming law. JPMorgan argues that its own size and complexity is super-attractive to customers, and that argument will probably win the day. The competing argument -- that the country enjoyed decades of relative financial calm after the segregation of bank activities after the Great Depression, and that it fell into a financial crisis not long after the removal of those safeguards -- is not taken seriously.
For what it's worth, Former Rep. Barney Frank -- the Frank in Dodd-Frank -- basically agreed with JPMorgan's Lake about Glass-Steagall, telling CNBC on Friday that he didn't think reinstating the law was nearly as important to the safety of the financial system as reforming the trade of the credit derivatives that nearly helped bring down that system the last time. And of course JPMorgan is lobbying hard on that issue, too.