On Thursday, JP Morgan admitted in its 8k filing that the firm had mismarked hundreds of billions worth of CDS contracts. The bank took the nearly unprecidented step of restating its already filed financial statements for Q1 2012.
Tonight, Reuters reports that JPM’s mismarking of CDS contracts (which are still marked to market daily, not to bankster fantasy) may be the smoking gun regulators need to bring criminal charges against JP Morgan executives.
From Reuters:
In a matter of days, the two-month-old criminal investigation into a $5.8 billion trading loss at JPMorgan Chase & Co. — known as the “London Whale” blunder — was transformed from dormant to potentially explosive.
Last Thursday, the day before JPMorgan reported its highly anticipated second-quarter earnings, the bank informed U.S. authorities that an internal investigation had found evidence that three London traders may have tried to hide the losses in some of their positions, said people familiar with the matter.
Late on Thursday evening, JPMorgan also decided it needed to restate its first-quarter earnings as a result.
The bank’s disclosure has breathed new life into the criminal investigation that up until last week lacked evidence of a smoking gun pointing to wrongdoing in the bank’s Chief Investment Office, said three people familiar with the matter.
Before last week’s disclosure, the criminal probe largely had focused on the personal trading of some CIO traders, two of those sources said. The authorities were looking for evidence that some in London may have sold shares of JPMorgan in advance of the firm’s May 10 disclosure that it could lose a minimum of $2 billion on the derivatives trades gone awry.
Now the investigation is focused on whether three JPMorgan employees in London committed fraud in reporting on their transactions.
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Okay, that’s it. I give the silver rockets no more than two weeks before they commence with firing. Any more paper cuts, and this company is going to bleed to death.
What doesn’t seem right to me is that JP Morgan self-disclosed his 2 billion loss, now he is self disclosing this as well. What could be the purpose? He would never of been caught, or if he did get caught, he would not have had any consequences result, so I don’t get what is going on. How did LIBOR get uncovered, were they caught by someone or was that some sort of self-disclosure also? Are the bankers themselves, setting a false collapse up? Why the msm coverage of late that we are slaves to central bankers, etc. Am I too suspicious? Sigh, I was so much happier when I trusted everyone.
President Obama has no choice, but to allow the Federal Government Agencies do their jobs and commence investigating and arresting these bankers. The other thing the President can do? Be like Iceland and tell the bankers to “F” off all debts are paid in full. Go back to the Gold Standard w/ Silver to boot. However, for those asleep and not paying attention? Thinking they are living the good life and surrounded with tons and tons of worthless paper named the Dollar. They are going to get hammered. Can you imagine people who make millions being stars, athletes, businessmen and women. All they have is dollars and or Electronic Fund Transfers (EFT) and to awake one morning or something during the day they their paper assets are worthless. They are not many people stacking!
“However, for those asleep and not paying attention? Thinking they are living the good life and surrounded with tons and tons of worthless paper named the Dollar. They are going to get hammered.
It is really uncomfortable for JPM to restate earnings, especially with the stock price already drastically weakened. But this isn’t going to factor into any fall from prominence for the bastards. Restating earnings when you find some low level employees lied about things is not going to push the company over the edge. Those lower level employees are going to be hung out to dry.
What it will do is force the company to ramp up its compliance checks and make sure this stuff isn’t going on anywhere else. Normally the Libor and London Whale stuff would have them checking for other places employees are manipulating the markets. And probably that is going on. But the manipulation of the silver markets is probably being done as an agent of the US Government and this stuff won’t stop that.
Don’t you love the fact that the back office drones end up losing $9 billion in IR Swaps, know they screwed up and front run the sale of their JPM holdings before the stock tanks 35%. Do you think that the Martha Stewart jail cell is still open for business?