Tag Archives: JPMorgan

JPMorgan Sees ‘Strong’ 2015 for German M&A Amid Activism

German mergers and acquisitions will have “another strong year” in 2015, helped by an increase in spinoffs and shareholder activism, a senior JPMorgan Chase & Co. (JPM) banker said.

“We’re coming from a very strong base and therefore it would be really ambitious to say we’ll see clearly more,” Dirk Albersmeier, head of German M&A at JPMorgan, told reporters in Frankfurt.

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JPMorgan Banker Backed $200 Million Madoff Loan in 2008

Daniel Bonventre (Bloomberg)

Daniel Bonventre (Bloomberg)

According to Bloomberg,

A former JPMorgan Chase & Co. (JPM) banker who managed Bernard Madoff’s account said the con man was on track to receive a $200 million loan less than a month before his arrest if the request hadn’t been dropped.

Daniel Bonventre, one of five ex-Madoff employees on trial for allegedly aiding the fraud, asked JPMorgan in November 2008 to borrow twice Madoff’s credit limit of $100 million, with U.S. Treasuries as collateral, Mark Doctoroff, who left the bank last year, testified yesterday in federal court in Manhattan.

“They are doing well financially,” Doctoroff said of Madoff’s securities firm in an e-mail to JPMorgan’s credit department on Nov. 17, 2008. “They are looking at the current market as an opportunity to make investments, true to their value investing style.”

The five former employees are accused of helping Madoff hide his fraud from customers, banks and regulators for years, and getting rich in the process. It’s the first criminal trial stemming from the scheme, which prosecutors say started in the early 1970s and imploded at the peak of the financial crisis.

The loan was part of a last-ditch attempt by Madoff to  secure cash as his Ponzi scheme was collapsing and  Bonventre’s role in the application process was one of the  many examples of his involvement in the fraud, prosecutors  have said.

Doctoroff, who was Madoff’s relationship manager at the bank from about February 2008 until Madoff’s arrest in December that year, said he didn’t know at the time Madoff had a formal investment advisory unit — the center of the Ponzi scheme involving fake trades — or that Madoff’s JPMorgan account was used for that business.

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According to The Wall Street Journal, J.P. Morgan Discussions Nearly Ended in a Lawsuit

J.P.  Morgan Chase

J.P. Morgan Chase (Getty Images)

According to The Wall Street Journal, in the end, it was J.P. Morgan Chase & Co. that blinked.

A day before J.P. Morgan Chief Executive James Dimon and Attorney General Eric Holder tentatively agreed to a record $13 billion settlement Friday, the Justice Department notified the bank it would file a civil lawsuit in six days and seek a large amount of damages from the largest U.S. lender by assets, according to people close to the talks.

The warning helped spur the bank closer to an agreement, even though the pact didn’t provide the bank what it wanted—protection against a continuing criminal probe of past mortgage-bond sales.

The historic agreement, which is being watched from Wall Street to Washington, isn’t finalized. The parties are still negotiating final terms.

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Central clearing will affect hedge funds

hedge_fundsAccording to Financial Times’ Brian Bollen, The implications of central clearing of over-the-counter derivatives for certain hedge fund trading strategies could be significant.

If Olivier Lebleu, London-based head of non-US distribution for Old Mutual Asset Management, is correct in his analysis, the imposition of higher levels of transparency will make life increasingly difficult for hedge fund traders pursuing relative value fixed income strategies.

To illustrate his thesis, he points to two of the most high-profile events of recent years in which one party identified vulnerability in another and constructed customised transactions specifically to position itself to exploit that vulnerability. Centralised clearing of OTC derivatives would diminish de facto and de jure the ability of Paulson & Co to trade against the subprime mortgage market as it controversially did in 2007, and the ability of hedge funds to stage a repeat of the “whale trade” attacks on JPMorgan in the spring of 2012.

“The primary pool of funds this process impacts are sophisticated credit strategies,” adds Peter Laurelli, a New York-based vice-president at eVestment, a provider of institutional investment data intelligence and analytic solutions.

“But it will impact other groups that trade in the OTC derivative markets on an opportunistic basis as well, including macro and multistrategy funds. I don’t think this process will eliminate the ability of hedge funds to exploit unique opportunities as the bilateral structure for OTC derivatives is not disappearing.”

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Knight Is Said To Have Spurned $500 Million Citadel Loan

Knight Capital Group Inc. (KCG) rejected a last-minute, $500 million rescue-loan offer from Citadel LLC on Aug. 5 as it worked on a competing plan from a group of investors, said two people with knowledge of the matter.

The loan terms would have given Citadel a minority stake inJersey City, New Jersey-based Knight’s stock and an interest in the market maker’s HotSpot foreign-exchange subsidiary, said the people, who spoke on condition of anonymity because the talks were private. Citadel, the $12.5 billion hedge fund run by billionaire Ken Griffin, competes with Knight’s market-making and electronic-trading business.

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RBS’s CEO Blames Libor-Manipulation On ‘Handful’ Of Individuals

Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester sought to limit the damage from the Libor-rigging scandal, blaming a “handful” of employees for attempting to manipulate the benchmark rate.

RBS dismissed four employees for trying to influence the individual responsible for Libor submissions following an internal investigation, the bank said today, without identifying the staff involved. Hester said it is too early to estimate the potential cost of fines and litigation linked to rate-rigging.

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Standard Life’s Grimstone Says Libor Scandal Is Hurting London

London’s reputation as a global financial center has been marred by the Libor-rigging scandal, said Gerry Grimstone, chairman of Standard Life Plc (SL/), Scotland’s largest insurer.

He was speaking on Bloomberg TV’s “The Pulse” show with Maryam Nemazee in London.

On London’s reputation after the Libor scandal:

“I’ve been in the financial services for 30 years and I’ve never known a time like this. It’s been terrible. Some of the language people use has been terrible. I’m concerned that the public don’t really understand it. The public talks about hanging bankers. We shouldn’t use words like cesspit to describe the City of London.”

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