Receiving Wide Coverage ...
Enforcement-Palooza: JPMorgan Chase may not be the only bank facing impending enforcement action. In an interview with the Wall Street Journal, U.S. Attorney General Eric Holder promised more cases or "a series of significant matters" related to the economic meltdown are on the way. Holder also dropped this sound bite during the interview (when asked, incidentally, about JPM): "No individual, no company is above the law. We don't investigate companies based on who a CEO is, but we don't avoid investigating companies based on who the CEO is, either." How much of a continuing about-face this represents for Holder, who essentially told lawmakers back in March that some banks were, in fact, too big to jail, is unclear. The AG offered few specifics about what "significant matters" the Justice Department had in the pipeline, including whether any prospective crisis-related cases would be criminal or civil. Meanwhile, the Securities and Exchange Commission continues to flex its enforcement muscles. Just yesterday, news broke that the regulator required hedge fund manager Philip Falcone to admit guilt as part of a settlement over market manipulation allegations. (Legal specialists tell the Journal this settlement "could become a model for future deals.") Now, the regulator has charged a former portfolio manager at Oppenheimer & Company with misleading investors, which Dealbook calls "a rare enforcement action involving the private equity industry."
Your Daily JPM Update: An executive-level anonymouse tells the FT the bank is working hard to fix issues related to its multiple probes. "Under the charismatic Jamie Dimon, chief executive, the bank has gone on a recruitment spree to shore up its internal controls and compliance procedures," the paper reports. The bank has also hired "venerable New York law firm" Paul, Weiss, Rifkind, Wharton & Garrison to conduct an internal investigation into its Hong Kong hiring practices in response to the SEC's investigation into whether it routinely hired the children of well-connected Chinese families. Meanwhile, Dealbook reminds everyone that lots of Wall Street banks, not just JPM, woo the children of Chinese leaders.
Wall Street Journal
Slumping aluminum deliveries into warehouses owned by big banks illustrate this notion: "After spending billions of dollars in a decades long expansion into all corners of the raw-materials business, Goldman Sachs, JPMorgan and Morgan Stanley are trying to sell commodities assets."
Goldman Sachs became the latest investment bank to be foiled by a rogue computer program on Tuesday, after a technical glitch caused erroneous orders to be placed for options on stocks with ticker symbols beginning with the letters I through K. "The trading error highlights the mounting risks of global financial markets that increasingly are being driven by computers rather than people," the paper notes.
The SEC is currently dealing with a turnover problem. But, insiders say, "the exits seem to be having little or no noticeable impact on the agency's work."
U.K. banks are "facing calls to overhaul the working culture for younger staff" after the death of a 21-year-old Bank of America intern.
A pullback in the U.S. repo market could have "profound implications for other assets."
New York Times
Economist Phillip Swagel argues that the auto bailout, Detroit's bankruptcy and the threat to use eminent domain to write down mortgage values may make it more difficult and/or more expensive for consumers to borrow as these are disputes "over the ability of lenders to enforce the terms set when the loan was made."
Several pundits are weighing in on this follow-up from Neil Irwin on an earlier Janet Yellen profile that cites "meticulously prepared", "her own thinker" and "methodical" among the reasons why the White House is uneasy picking her as Federal Reserve chair. "Basically, the White House likes being bad at economic policy and doesn't like Janet Yellen [because] she'd be good at it," tweeted Business Insider's Josh Barro. Meanwhile, allies of both Yellen and other Fed chair frontrunner Lawrence Summers continue their behind-the-scenes campaign efforts.
Lydia DePillis of Wonkblog on why admissions of guilt matter: "Don't underestimate the importance of sending a message to banks and the public that the SEC is a policing agency, here to prosecute wrongdoing, not just to exact fines that banks can treat as the cost of doing business."