J P Morgan - Chase Category Archives — Page 5 of 5 — Investor Lawyers Blog Published By Investment Fraud Attorneys

Former JP Morgan Chase and Credit Suisse Banker is Sentenced to 10 Years in Prison for Insider Trading Tip Scam

Published on: June 12, 2008 | by Shepherd Smith Edwards & Kantas, LLP

In the U.S. District Court for the Southern District of New York, former JP Morgan Chase and Credit Suisse investment banker Hafiz Muhammed Zubair Naseem was sentenced to 10 years in prison for his involvement in an insider tip scam.

Prosecutors say that Naseem retrieved insider information from the internal bases of both Credit Suisse and JP Morgan Chase. Confidential information that he pulled from Credit Suisse’s files included data related to possible deals with TXU Corp., John H. Harland Co., Caremark Rx Inc., Hydril Co., Trammell Crow Co., Jacuzzi Brands Inc., Veritas DGC Inc., Energy Partners Ltd., and Northwestern Corp.

Insider information from JP Morgan Chase dealt with possible transactions in Engineered Support Systems, Computer Science Systems, Alliance Data Systems, K2 Inc., Education Management Corp., Aramark Corp., Huntsman Corp., and Northwestern Corp.

JP Morgan Chase’s Bear Stearns Acquisition Could Make The Firm Vulnerable to Lawsuits

Published on: March 24, 2008 | by Shepherd Smith Edwards & Kantas, LLP

Following JP Morgan Chase & Co’s acquisition of Bear Stearns Companies Inc., JP Morgan Chase Chief Financial Officer Michael Cavanagh says the firm is reserving as much as $6 billion for “transaction-related costs,” including possible litigation.

Class action lawsuits could come from investors regarding corporate disclosure, as well as from employees over pension plans. Any securities lawsuits targeting Bear Stearns as the plaintiff will also go to JP Morgan Chase.

Lawsuits expected may include those related to the 1934 Securities Exchange Act Section 10(b) (a general antifraud provision) by investors that may feel that Bear Stearns did not disclose accurate information about the company’s health. Employees may sue if they believe that the Employee Retirement Income Security Act (ERISA) had been violated.

Wachovia Securities Analyst Comments on Bear Stearns’ Sale and Calls Merrill Lynch the “Riskiest” Investment Bank

Published on: March 19, 2008 | by Shepherd Smith Edwards & Kantas, LLP

In a note to investors, Wachovia Securities Analyst Doug Sipkin commented on the state of the leading Wall Street securities firms in light of the worsening global credit crisis.

Sipkin blamed the “The failure of Bear Stearns” on a “management issue” rather than a “market issue.” JP Morgan Chase & Co. recently purchased Bear Stearns, the fifth largest securities company, for $236 million-that’s $2/share-a 90% market drop in just two days. The securities firm ran out of money after clients took away funds.

Sipkin, however, reassured investors that the action taken by the Federal Reserve to reduce emergency lending rates will keep the other four big securities firms in business.

Bear Stearns Sold to JP Morgan – One Firm’s Trash Is Another Firm’s Treasure!

Published on: March 17, 2008 | by Shepherd Smith Edwards & Kantas, LLP

Yesterday – Sunday – it was reported that JP Morgan bailed-out Bear Stearns by paying its shareholders a measly quarter of a billion dollars. One question plaguing Wall Street is how many other victims of sub-prime mortgages will emerge? Below we assess the winners and losers of this deal and also report some good news: Claims by investors who had accounts at Bear Stearns are not dead!

Winners and Losers?

A year ago, BSC’s stock sold for $150 per share. Last Friday BSC’s shares fell from 57 to 30. Reportedly, as government big-wigs and financial moguls met on Saturday to attempt to salvage BSC, there were discussions with several firms to pay around $15 per share but on Sunday only JP Morgan was left – offering $2 per share. Although BSC faced certain bankruptcy if nothing were done, Bear Stearns shareholders say they are the big losers.

Deutsche Bank Trust Company, Goldman Sachs Group, and Bank of America Corporation are Among the 21 Lenders Named in Cleveland, Ohio Lawsuit

Published on: January 24, 2008 | by Shepherd Smith Edwards & Kantas, LLP

The city of Cleveland, Ohio is suing 21 financial institutions for hundreds of millions of dollars in damages caused by subprime lending and securitization. The defendants named in the lawsuit are:

• Deutsche Bank Trust Company • Ameriquest Mortgage Company • Bank of America Corporation • The Bear Stearns Companies • Citigroup, Inc.

• Countrywide Financial Corp.

JP Morgan Will Pay $500,000 to Settle Municipal Securities SRO Claim

Published on: December 18, 2007 | by Shepherd Smith Edwards & Kantas, LLP

JP Morgan Securities Inc. says it will pay $500,000 to settle charges that it failed to disclose to regulators that it used and paid consultants to acquire a number of municipal securities offerings.

The settlement agreement was announced by the Financial Regulatory Authority (FINRA), which is in charge of enforcing the Municipal Securities Rulemaking Board (MSRB) rules and any violations. According to MSRB regulations, firms must disclose any payments to consultants for municipal securities offerings.

FINRA says that JP Morgan actually stated in its MSRB filing that it did not use or pay any consultants to make any municipal securities-related transactions. In fact, from January 22 through June 2004, JP Morgan actually used consultants extensively in connection to its municipal bond business, paying some 40 consultants $7.1 million in total.

Citigroup, Lehman Brothers, DeutscheBank and other Firms Fined for Failing to Deliver Trade Confirmations.

Published on: October 9, 2007 | by Shepherd Smith Edwards & Kantas, LLP

NYSE Regulation fined 14 of its member firms a total of $10.4 million in fines for failing to deliver trade confirmations to their clients and other violations.

Citigroup Global Markets received the heaviest fine of $2.25 million for failing to deliver trade confirmation documents in more than a million consumer transactions. Lehman Brothers and DeutscheBank were each fined $1.25 million.

Other firms sanctioned included UBS Securities; Bear Stearns & Co.; Credit Suisse Securities (USA) LLC ; Banc of America Securities LLC; Goldman Sachs & Co.; JP Morgan Securities; Wachovia Capital Markets LLC; and Keefe, Bruyette & Woods Inc. Fines levied against these firms ranged from $375,000 to $800,000.

JP Morgan Chase and Co. Not Liable For Securities Fraud Related To Enron Collapse, Says New York District Court

Published on: April 11, 2007 | by Shepherd Smith Edwards & Kantas, LLP

For a second time, the U.S. District Court for the Southern District of New York told J.P. Morgan Chase &Co. shareholders that they cannot hold the investment bank responsible for securities fraud related to its alleged complicity in helping Enron cover up its true financial situation.

Judge Sidney H. Stein said the second amended complaint had the same flaws as the first complaint: The Enron shareholders, not the investment bank’s shareholders are the victims of Enron’s collapse and therefore the ones defrauded-if the allegations were borne out.

According to the plaintiffs, they became investors in JPM Chase because it was known for its financial discipline and integrity. The bank, however, was unlawfully helping and abetting Enron’s wrongful conduct. Its reputation suffered after its role in the Enron scandal was revealed.

American Association for Justice Asks SEC To Publicly Disclose Relationship To Merrill Lynch

Published on: January 23, 2007 | by Shepherd Smith Edwards & Kantas, LLP

The AAJ (American Association for Justice) is asking Securities and Exchange Commission Chairman Chris Cox and General Counsel Brian Cartwright to address media reports that the SEC thought about supporting Merrill Lynch & Company during attempts by Enron shareholders to hold Enron banks accountable. The AAJ wants the SEC to publicly disclose the extent of its connections to Merrill Lynch.

On January 12, 2007, the AAJ turned in to the SEC a Freedom of Information Act request. The AAJ wants the SEC to disclose if, how, and when they communicated with Merrill Lynch regarding Enron and whether Counsel Cartwright and Chairman Cox have recused themselves from the Enron case because they had both once worked for the law firm (Latham and Watkins) representing Merrill Lynch. Also, the Center for Responsive Politics is reporting that Latham & Watkins was Chairman Cox’s largest contributor while he served in the U.S. Congress. The law firm reportedly contributed $124,594 on two separate occasions.

At least 30 states are supporting the Enron shareholders who have filed lawsuits against investment banks that are accused of taking part in accounting fraud because of the Enron scandal. Merrill Lynch is one of these banks.

JP Morgan Chase Reports Strong Profits For 4th Quarter From Investment Banking Growth And The Sale Of Their Trust Unit

Published on: January 18, 2007 | by Shepherd Smith Edwards & Kantas, LLP

JP Morgan Chase & Co. is reporting a 68% increase from the sale of their corporate trust unit, as well as strong investment growth. Credit quality became weaker, however. This suggests that the investment bank’s individual and commercial clients, like with many major banks, had a more difficult time paying their bills.

JP Morgan Chase is the third largest bank in the U.S. For its 4th quarter, the bank reported a net income of $4.53 billion, up $2.7 billion from the previous year. Revenue was $16.05 billion. According to analysts, 2007 is looking “modestly better than expected” for JP Morgan Chase.

Meanwhile, Wells Fargo & Co, the fifth largest bank in the country, reported a 13% rise in fourth quarter earnings. Credit losses for Wells Fargo also grew.