JPMorgan faces money laundering probe – source

JPMorgan Chase & Co's compliance with U.S. anti-money laundering laws is being reviewed by a banking regulator, a source said, making the largest U.S. bank the latest target of a wide investigation of how banks prevent transactions involving drug money and sanctioned countries.

The Office of the Comptroller of the Currency, an independent branch within the Treasury Department, is examining JPMorgan's systems that are designed to monitor and filter such transactions, said the source, who is familiar with the situation.

The exact scope of the inquiry and the size of potential liabilities for the bank could not be learned.

JPMorgan spokesman Joseph Evangelisti declined to comment on Saturday.

In its quarterly filing with the U.S. Securities and Exchange Commission last month, JPMorgan said it expected heightened scrutiny by regulators of its compliance with new and existing regulations, including anti-money laundering laws.

The latest investigation comes in the midst of stepped-up efforts by regulators to crack down on money laundering, including transfers of drug money through bank networks and funds from countries facing international sanctions such as Iran.

The problem also has become a focus area for the Department of Justice, which wants to ramp up the number of criminal cases it brings under the Bank Secrecy Act, a law that requires financial institutions and their employees to take steps to prevent money laundering.

U.S. regulators also are potentially examining illicit transactions tied to Venezuela, the source said.

Earlier this summer, British bank HSBC Holdings Plc set aside $700 million to cover investigations that could result in one of the biggest ever settlements or fines. A U.S. Senatereport criticized a "pervasively polluted" culture at the bank. The Senate panel examined transactions tied to Mexico, Iran, the Cayman Islands and Saudi Arabia.

Last month, New York's banking regulator reached a $340 million settlement with British bank Standard Chartered Plc after the regulator investigated transactions tied to Iran.

There have also been smaller cases in which the comptroller's office targeted weaknesses in how banks clear checks potentially tied to shadowy money transactions through a process called remote-deposit capture.

In April, the OCC identified a number of anti-money laundering deficiencies at Citigroup Inc. The inquiry investigated a monitoring gap at the bank tied to Citigroup's remote deposit capture business.

At the time, Citigroup said it had fixed the deficiencies or was in the process of doing so.

The New York Times earlier reported the news of the JPMorgan investigation. — Reuters

source: gmanetwork.com

New iPhone could boost US GDP, JP Morgan says

The next generation iPhone 5, which Apple Inc. plans to release this week, could not only boost the tech giant’s bottom line – but could give a significant boost to the overall U.S. economy.

Sales of the new iPhone could add between a quarter and a half percentage point to fourth quarter annualized growth in the U.S., according to J.P. Morgan’s chief economist, Michael Feroli in a note to clients on Monday.

Such an impact would be significant.

“Calculated using the so-called retail control method, sales of iPhone 5 could boost annualized GDP growth by $3.2 billion, or $12.8 billion at an annual rate,” Feroli wrote. That 0.33 percentage-point boost, he added, “would limit the downside risk to our Q4 GDP growth protection, which remains 2.0 percent.”

Feroli laid out his math. J.P. Morgan’s analysts expect Apple to sell around 8 million iPhone 5s in the fourth quarter. They expect the sales price to be about $600.

With about $200 in discounted import component costs, the government can factor in $400 per phone into its measure of gross domestic product for the fourth quarter.

Feroli said the estimate of between a quarter to a half point of annualized GDP “seems fairly large, and for that reason should be treated skeptically.” But, he added, “we think the recent evidence is consistent with this projection.”

Feroli said that when the last iPhone was launched in October 2011, sales significantly outperformed expectations.

“Given the iPhone 5 launch is expected to be much larger, we think the estimate mentioned … is reasonable,” Feroli wrote.

According to a recent Reuters poll of Wall Street dealers and economists, U.S. GDP was seen at 2.0 percent on average in 2013, down slightly from estimates this summer.

source: interaksyon.com

JPMorgan suffers big loss

NEW YORK (CNNMoney) -- JPMorgan Chase, in a surprise announcement, said Thursday that it has suffered trading losses of $2 billion since the start of April.

The group that suffered the losses is part of the bank's so-called corporate unit, and had been making trades designed to hedge against risk.

Net losses, after factoring in other securities gains, are expected to exceed $800 million by the end of the second quarter. And losses could increase depending on market conditions and the bank's actions moving forward, CEO Jamie Dimon said.

The unit had been expected to post a net gain of $200 million.

Shares of JPMorgan (JPM, Fortune 500) fell sharply in trading after the market close, with losses approaching 7%. The stock continued to slide Friday morning, down 4.5% in premarket trading.

Dimon, speaking to analysts and reporters on a conference call, said the losses were caused by "errors," "sloppiness" and "bad judgment."

"This was a unique thing we did," Dimon said. "Obviously it had a lot of problems. It was a bad strategy. It became more complex, it was poorly managed."

Last month, rumors swirled around a JPMorgan employee based in London who had, according to the Wall Street Journal, been taking large positions in credit default swaps. The employee was said to work in the bank's Chief Investment Office.

source: CNN