” JP Morgan Denied `Sberbank and VTB’ the right to make `Transactions’ of Customer Payments”

#AceFinanceNews says according to latest reports in MOSCOW, February 06. /ITAR-TASS/. US regulators’ struggle for a clear banking system caught up with the major Russian market players. According to Kommersant daily, JP Morgan denied Sberbank and VTB the right to make transactions of customer payments since the US bank revised approach transparency of operations.

JP Morgan Meanwhile, JP Morgan is not as suspicious about most of other Russian banks — obviously, according to the law of large numbers, the paper says.

According to the paper’s source, the US partner notified the banks of ceasing their operations with customer payments, though continued its own treasury transactions with Sberbank and VTB.

In effect, the paper says, the banks transferred all customer transactions to Bank of America and Bank of New York (Sberbank) and Citi and Bank of America (VTB). VTB is going to take treasury transactions out of JP Morgan, whereas Sberbank plans to continue such partnership.

Actions of JP Morgan, which is one the banks that leads by the number of the US authorities’ complaints, are comprehensible. Last year alone JP Morgan paid financial regulators about $20 billion for various violations on mortgage-backed securities. This year the bank is to pay another fine of $2.6 billion for failure to notify the authorities of suspicious customer transactions. Under such circumstances, the bank’s selective refusal to cooperate raised eyebrows in the market as procedure remained unchanged for a number of other Russian banks holding correspondent accounts in JP Morgan.

It may be the business scale of the Russian leading banks that caused such a coolness in JP Morgan attitude, the paper says.

Along with the maximal number of customer transactions as compared to other Russian banks, Sberbank and VTB carry out a large number of operations in the interests of smaller banks holding correspondent accounts in these banks and unable to open them in US banks.

 

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Elizabeth Warren: “What She Had to Say About JP Morgan’s CEO Jamie Dimon”

#AceFinanceNews says on Saturday night at 9:00 PM/EST Bloomberg aired an extra special episode of “Political Capital with Al Hunt,” his guest is none other than Senator Elizabeth Warren (D-MA), and she had some fairly blunt things to say about JP Morgan‘s CEO, Jamie Dimon.

English: Wall Street sign on Wall Street

English: Wall Street sign on Wall Street (Photo credit: Wikipedia)

Warren was elected on crusading against Wall Street malfeasance, and JP Morgan is Wall Street’s bad boy right now. The bank has paid $20 billion in legal fees to the government over the last year —that’s enough to pay the New York Yankees for 2o years — and just this week paid out $1.7 billion for failing to alert authorities of  their former client, Bernie Madoff‘s infamous decades long Ponzi scheme.

What’s more, knowing that Madoff was a fraud, JPM got rid of their $275 million exposure to Madoff shortly before he was arrested in December 2008.

When asked whether Jamie Dimon should be replaced as a result of these issues, Warren said: “Look, the real question is, do you have somebody who has shown they understand there were problems in the past and that they have a different plan going forward? What JPMorgan Chase and the other large financial institutions have done is they have continued to get bigger and bigger and load up more and more on risk…I’m waiting for him to demonstrate that understanding… And he’s had a long, long time.”

One thing Dimon can understand, however, is the health of his bank. JPM’s shares are up 28 percent over the last 12 months, and analysts expect the bank to have pulled in $23.4 billion in revenues when it reports Q4 earnings next week — a small improvement from Q3, and more than any other big bank.

Official portrait of United States Senator (R-OK).

Official portrait of United States Senator (R-OK). (Photo credit: Wikipedia)

So JPM can handle the lawsuits in stride, but Warren cannot. Just this week, after JP Morgan’s settlement, she teamed up with Senator Tom Coburn (R-OK) to introduce a new bill called the Truth In Settlements Act.

Basically, it would require the Justice Department and other agencies handling settlements against corporations to be transparent about their negotiations, and make agreements easy to find online (you can watch a video of her speech on the floor of the house below).

Under this new law, regulators and law enforcement agencies would still be able to use confidential settlements, but companies would have to disclose how often they are used and why.

Now, since the Justice Department has said that it’s going to continue going after not just JP Morgan, but also other Wall Street banks for issues dating back to the financial crisis, it’s easy to see where Warren’s coming from with this bill. The New York Times reported this week that Wall Street banks could pay up to $50 billion to “buy peace” with the government.

“When you dig below the surface, settlements that seem tough and fair can look like sweetheart deals,” said Warren. “If we expect government agencies to hold companies accountable for breaking the law. Then we the public must be able to keep agencies accountable for enforcing the law. We can’t do that if we’re kept in the dark.”

 

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Who will Receive What, When JP Morgan’s Fine of $13 Billion is Finally Settled

Dismissed U.S. attorneys summary

Dismissed U.S. attorneys summary (Photo credit: Wikipedia)

 

Because the deal was still in the works, the details of JP Morgan‘s record $13 billion fine to settle civil violations related to mortgage-backed securities it sold before the housing crisis have been murky.

 

But now the WSJ has the break down.

 

For the record, the Justice Department has decided not to make JP Morgan pay punitive damages for mortgages sold by Bear Stearns and Washington Mutual, since JPM essentially helped the government out by buying the banks as they were collapsing.

 

So that’s nice, but the figure will still stay at $13 billion.

 

Now for the numbers:

 

  • $4 billion will go to Fannie Mae and Freddie Mac
  • $4 billion will go to underwater homeowners
  • $3 billion will go to institutional investors that lost money on bad mortgage-backed securities
  • and $2 billion will serve as a penalty for JPM’s conduct in the lead up to the financial crisis

 

According to the WSJ, all the drama surrounding this deal started on September 24th, the day the DOJ set a deadline to file a civil suit against the bank over MBS. The day before, JPM called and offered $3 billion, which the DOJ refused.

 

The JPM called back and said they’d negotiate a higher figure if they didn’t have to go to Court.

 

That brings us to now. After the government shut down ended, lawyers at the DOJ told JP Morgan they had six days to cobble an agreement together. What that means is that we could have a finalized agreement by this week.

 

For the full story, head to the WSJ>

 

 

 

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Takeover’s Grow Under New Cash For Contracts

08 March 2010 Marsh Mills Plymouth

08 March 2010 Marsh Mills Plymouth (Photo credit: Wikipedia)

The Guardian reports that Biffa, which has contracts with many local councils, is the subject of a £520mn takeover offer from Clearbrook Capital, Chinook Urban Mining and JP Morgan.

This type of report seems to now have become a daily occurrence as more under the wire take overs are proposed! We have for many years criticised companies like Biffa that have taken over our public services with ” Public Finance Initiatives ” whereby it is a so-called partnership under the guise of public and private ownership! When in truth it is a simple way for successive governments to appease their voters and sponsors as to offer what has become known as ” Cash 4 Contracts” as we have witnessed with the G4’s debacle!

But following on from this comes an even more lucrative plan and that is the takeover of contracts offer by public funding, transferred into public finance initiative or service’s provided by one company! Whilst ownership is transferred into private hands by the vesting of interest into companies, such as ” Clearbrook Capital, JP Morgan or Chinook  Urban Mining! Upon  closer examination of these 3 alone we are able to understand the reason behind the takeover offer!

Firstly: Partners (GIP), the private equity duo that bought out UK waste services company Biffa almost four years ago for £1.23bn, are in talks to sell the business for nothing in return for any future gains from mergers.

That by the way is the former buy-out arm of HSBC and has been involved heavily with partners Goldman Sachs, so comes no surprise that a ” private equity firm” such as Clearbrook Capital should not be part of the syndicate of the three, tasked with capital raising.

Secondly: Chinook Urban Mining – Why urban you may ask but its reason is simply as they put it! The process of reclaiming compounds and elements from products, buildings and waste.As they believe our waste products, we throwaway each day contain rare earth minerals that by exacting certain processes can be extracted and make profits!

Also Biffa holds all the contracts for waste recycling and is ideally placed to enable a take over and use of their contracts to help the procedure! As they are deeply in debt they need a vast amount of funds and as Goldman Sachs states they were unable to sell the company!

As Biffa holds contracts with local authorities including Portsmouth city council, East Hampshire district and Winchester city council, and the Isle of Anglesey county council. Also they have debts and all previous attempts by Goldman Sachs to sell the company fell short, leaving the waste manager facing a race against time to repay £1.1bn of loans.

Thirdly: Enter – JP Morgan the bankers and of course and Montagu Private Equity and Global Infrastructure Partners who presently owned Biffa! Their company overview makes for interesting reading:

Company Overview:

Global Infrastructure Partners is a principal investment firm specializing in investments in infrastructure assets. It seeks to invest in energy with a focus on natural resources infrastructure and power and utilities; transportation with an emphasis on air transport infrastructure, freight railroad, and seaports; and water and waste with a focus on water distribution and treatment and waste management. The firm also seeks to invest globally with a sector focus on power generation and transmission, gas storage and pipelines, water assets, airports, air traffic control, ports, railroads, and toll roads.

Conclusion:

So what does everyone including Biffa gain?

Well of course their contracts are purchased by the syndicate and this then repays their debts to all the councils named! Thus providing much-needed funds for cash-strapped councils! Let us not forget that these contracts were originally owned by the public or the taxpayer and they so far have not seen a profit from this original deal!

Of course ” Montagu Private Equity and Global Infrastructure Partners own it and reasons why they invested into this type of company! As is stated in Wikipedia – The company was taken private again in April 2008 by Waste Acquisition Co, a consortium of three private equity and investment companies. The deal valued Biffa at around £1.2 billion. 

Of course Biffa’s debts they now owe are not far short of this figure and need this deal!

So what about the history of these events! 

This came about as a result and the sale of ” Severn Trent Water Authority ” that was privatised and became ” Severn Trent” in 1989. Then in 1991 it acquired Biffa a leading waste management business.

Global Infrastructure Partners – Current assets include a 75% stake in Biffa Limited, a UK-based waste management company and as stated are willing to sell the business for ” nothing” in return for any future gains from mergers! Well this takeover that is being orchestrated will make sure they get their return and the upshot is the tax payer who originally owned these contracts will get nothing! Just looking at the capitalisation and turnover in 2005/06 Biffa made good profits, following being demerged from Severn Trent Plc.

In January 2007 the American side of Severn Trent Laboratories was sold to HIG Capital. 

So by 2008 the privatisation was complete and it would be a fully operational on the face of it profit-making company, that was ripe for the picking and valued at £1.2 billion when ” Global Infrastructure Partners” acquired their 75% stake!

But still not a penny for the taxpayers! 

The main companies in the group are Severn Trent Water and Severn Trent Services.Severn Trent Laboratories was rebranded as part of Severn Trent Services in 2010 to better streamline the company to give a single worldwide image, and not a series of separate organisations with different identities.

So when the guardian reported this story l read it with interest and especially this part – The offer was submitted last week to Pricewaterhouse Coopers, the advisers to the 76 banks and financial institutions that lent funds to Biffa’s current owners! The lenders have formed a steering committee comprising HSBC, GE Capital, Dexia and Prudential M&G to consider the approach. Anyone betting on who the other 72 others maybe and could one maybe be JP Morgan!

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