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Monthly Archives: February 2014

JPMorgans Decade of Criminality

The non-profit group Better Markets filed a lawsuit against the Justice Department on Monday 10th February 2014 to block what it called an “unlawful” $13 billion settlement with JP Morgan over bad mortgage loans sold to investors before the financial crisis.

Jamie Dimon

25 reasons you can’t trust JPMorgan – Fines & Penalties

( many thanks to Better Markets for their research )

  1. United States v. JPMorgan Case Bank, NA, No-1:14-cr-7 (S.D.N.Y. Jan 8, 2014) ($1.7 billion criminal penalty);
  2. In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-13-109 (Jan. 7, 2014) ($350 million civil penalty);In re JPMorgan Chase Bank, N.A., Dept. of the Treasury Financial Crimes Enforcement Network Admin. Proceeding No. 2014-1 (Jan. 7, 2014) ($461 million civil penalty) (all for violations of law arising from the bank’s role in connection with Bernie Madoff’s Ponzi scheme, the largest in the history of the U.S.);
  3. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 14-01 (Oct. 16, 2013) ($100 million civil penalty);
  4. In re JPMorgan Chase & Co., SEC Admin. Proceeding No. 3-15507 (Sept. 19, 2013) ($200 million civil penalty);
  5. In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 13-031-CMP-HC (Sept. 18, 2013) ($200 million civil penalty);
  6. UK Financial Conduct Authority, Final Notice to JP Morgan Chase Bank, N.A. (Sept. 18, 2013) (£137.6 million ($221 million) penalty);
  7. In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-2013-75, #2013-140 (Sept. 17, 2013) ($300 million civil penalty) (all for violations of federal law in connection with the proprietary trading losses sustained by JP Morgan Chase in connection with the high risk derivatives bet referred to as the “London Whale”);
  8. In re JPMorgan Chase Bank, N.A., CFPB Admin. Proceeding No. 2013-CFPB-0007 (Sept. 19, 2013) ($20 million civil penalty and $309 million refund to customers);
  9. In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-2013-46 (Sept. 18, 2013) ($60 million civil penalty) (both for violations in connection with JP Morgan Chase’s billing practices and fraudulent sale of so-called Identity Protection Products to customers);
  10. In Re Make-Whole Payments and Related Bidding Strategies, FERC Admin. Proceeding Nos. IN11-8-000, IN13-5-000 (July 30, 2013) (civil penalty of $285 million and disgorgement of $125 million for energy market manipulation);
  11. SEC v. J.P. Morgan Sec. LLC, No. 12-cv-1862 (D.D.C. Jan. 7, 2013) ($301 million in civil penalties and disgorgement for improper conduct related to offerings of mortgage-backed securities);
  12. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 12-37 (Sept. 27, 2012) ($600,000 civil penalty for violations of the Commodities Exchange Act relating to trading in excess of position limits);
  13. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 12-17 (Apr. 4, 2012) ($20 million civil penalty for the unlawful handling of customer segregated funds relating to the bankruptcy of Lehman Brothers Holdings, Inc.);
  14. United States v. Bank of America, No. 12-cv-00361 (D.D.C. 2012) (for foreclosure and mortgage-loan servicing abuses during the Financial Crisis, with JP Morgan Chase paying $5.3 billion in monetary and consumer relief);
  15. In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 12-009-CMP-HC (Feb. 9, 2012) ($275 million in monetary relief for unsafe and unsound practices in residential mortgage loan servicing and foreclosure processing);
  16. SEC v. J.P. Morgan Sec. LLC, No. 11-cv-03877 (D.N.J. July 7, 2011) ($51.2 million in civil penalties and disgorgement);
  17. In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 11-081-WA/RB-HC (July 6, 2011) (compliance plan and corrective action requirements);
  18. In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-11-63 (July 6, 2011) ($22 million civil penalty) (all for anticompetitive practices in connection with municipal securities transactions);
  19. SEC v. J.P. Morgan Sec., LLC, No. 11-cv-4206 (S.D.N.Y. June 21, 2011) ($153.6 million in civil penalties and disgorgement for violations of the securities laws relating to misleading investors in connection with synthetic collateralized debt obligations);
  20. In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-11-15, #2011-050 (Apr. 13, 2011) (consent order mandating compliance plan and other corrective action resulting from unsafe and unsound mortgage servicing practices);
  21. In re J.P. Morgan Sec. Inc., SEC Admin. Proceeding No. 3-13673 (Nov. 4, 2009) ($25 million civil penalty for violations of the securities laws relating to the Jefferson County derivatives trading and bribery scandal);
  22. In re JP Morgan Chase & Co, Attorney General of the State of NY Investor Protection Bureau, Assurance of Discontinuance Pursuant to Exec. Law §63(15) (June 2, 2009) ($25 million civil penalty for misrepresenting risks associated with auction rate securities);
  23. In re JPMorgan Chase & Co., SEC Admin. Proceeding No. 3-13000 (Mar. 27, 2008) ($1.3 million civil disgorgement for violations of the securities laws relating to JPM’s role as asset-backed indenture trustee to certain special purpose vehicles);
  24. In re J.P. Morgan Sec. Inc., SEC Admin. Proceeding No. 3-11828 (Feb. 14, 2005) ($2.1 million in civil fines and penalties for violations of Securities Act record-keeping requirements); and
  25. SEC v. J.P. Morgan Securities Inc., 03-cv-2939 (WHP) (S.D.N.Y. Apr. 28, 2003) ($50 million in civil penalties and disgorgements as part of a global settlement for research analyst conflict of interests).

eBay’s Securities and Exchange Commission Report – Dec 2013

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ebay report

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eBay’s financial report to the United States Securities and Exchange Commission just issued makes interesting, if rather heavy, reading.

This year , eBay has recognised that Bitcoin is going to be a significant potential competition

This is the section of the report worth reading –  ( my highlights in red text )

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PayPal also faces competition and potential competition from:
 
money remitters such as MoneyGram, Western Union, Global Payments, Inc., Xoom and Euronet;
bill payment services, including CheckFree, a subsidiary of Fiserv;
services that provide online merchants the ability to offer their customers the option of paying for purchases from their bank account or paying on credit, including Western Union’s WU Pay, Dwolla, Acculynk, TeleCheck (a subsidiary of First Data), iDEAL in the Netherlands, Klarna in several European countries, Sofortuberweisung (which recently has agreed to merge with Klarna) in Germany, PayLib in France and the MyBank pan-European initiative;
issuers of stored value targeted at online payments, including NetSpend, Green Dot, PayNearMe, UKash and Qiwi in Russia;
other international online payment-services providers such as AliPay, the PayU group of companies (owned by Naspers), PagSeguro and Bcash (owned by Naspers);
other providers of online account-based payments, such as Skrill, ClickandBuy (owned by Deutsche Telekom), Barclays Pingit in the U.K., Kwixo in France, and Paymate and Visa PayClick in Australia;
payment services targeting users of social networks and online gaming, often through billing to the consumer’s mobile phone account, including PlaySpan (owned by Visa), Boku, Bango and Payfone;
payment services enabling banks to offer their online banking customers the ability to send and receive payments through their bank account, including PopMoney from Fiserv, which has a collaboration agreement with Visa, and ClearXchange (a joint venture among Wells Fargo, Bank of America and JP Morgan Chase);
online shopping services that provide special offers linked to a specific payment provider, such as Visa’s RightCliq, MasterCard MarketPlace, TrialPay and Tapjoy;
services such as Coinbase and Bitpay that help merchants accept and manage virtual currencies such as Bitcoin; and
cash.

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Their report  also gives us a clue as to what their strategy is going to be to counter the threat from Bitcoin – This is the telling section

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PayPal’s competitors may be able to innovate and respond to new or emerging technologies and changes in customer requirements faster and more effectively than PayPal. Some of these competitors may also be subject to less burdensome licensing, anti-money laundering, counter-terrorist financing and other regulatory requirements than PayPal, which is subject to additional regulations based on, among other factors, its licensure as a bank in Luxembourg.

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So, we can see what their approach is going to be – this sentence puts it very clearly:

“subject to less burdensome licensing, anti-money laundering, counter-terrorist financing”

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So be prepared for more claims that Bitcoin is  ” used by money-launderers and terrorists ” !! …

let’s examine the validity of this claim

The current TOTAL market capitalisation of Bitcoin is around $11 billion

The current amount of money-laundering for drugs and terrorism last year was subject to international studies that have estimated that cross-border flows of global proceeds of financial crimes totalled between $1 trillion and $1.6 trillion . ( thats 1,000 times the entire stock of Bitcoins )

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some more facts on how the existing Banking Sector supports drugs, terrorism and money laundering

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In July 2012 the US Senate Committee on Homeland Security and Governmental Affairs issued a 339 page report detailing a  catalogue of ”criminal ” behaviour by London based HSBC. This includes laundering over $881 million for the Mexican Sinaloa Cartel and for the Norte del Valle Cartel in Colombia. Besides this, HSBC affiliated banks such as HBUS repeatedly broke American AML laws by their long standing and severe AML deficiencies which allowed Saudi banks such as Al Rajhi to finance terrorist groups that included Al-Qaeda. HBUS the American affiliate of HSBC suppliedAl Rajhi bank with nearly $1 billion in US dollars.

in addition

Wikipedia gives this historical information

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Bank of New York: US$7 billion of Russian capital flight laundered through accounts controlled by bank executives, late 1990’s

Sani Abacha: US$2–5 billion of government assets laundered through Banks in the UK, Luxembourg, Jersey (Channel Islands), and Switzerland, by the president of Nigeria

Standard Chartered: paid $330 million in fines for money-laundering hundreds of billions of dollars for Iran. The money-laundering took place in the 2000s and occurred for “nearly a decade to hide 60,000 transactions worth $250 billion”

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links

United States Department of State Report  2012  – Volume II: Money Laundering and Financial Crimes

http://www.state.gov/j/inl/rls/nrcrpt/2013/vol2/

United Nations Office on Drugs and Crime  2013

http://www.unodc.org/unodc/en/corruption/index.html?ref=menuside

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eBays Report to the Securities and Exchange CommissionDec 2013 – IN FULL

http://www.sec.gov/Archives/edgar/data/1065088/000106508814000010/ebay201310-k.htm

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Price Waterhouse Cooper have commissioned a Secret Report on Bitcoin

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On 27th January 2014, Price Waterhouse Cooper, one of the Top Three Global Accountancy firms commissioned an in-house report into how its high-roller clients in the gambling, entertainment and music industries might build branding and competitive impact by adopting Bitcoin

that’s big news for Bitcoin.

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PWC -Report-front_cover

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But , the Bigger News …..

is that the report was accidentally placed on the publicly accessible  side of their website , and then rapidly removed by Price Waterhouse Coopers management without any explanation.

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In chasing up this story I have sent numerous emails to both PwC’s Head Office and its Publicity Agency without any response.  So you may draw your own conclusion as to why they will not verify or deny the story?

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But the report certainly does exist  ( I have a pdf copy ) and it’s my belief that someone high up in PwC’s senior  management panicked when they discovered the dynamite nature of the news coming out that PwC was advising the use and verification of Bitcoin as a main-stream business practice.

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I’m sure also that they were  afraid of a big slap on the wrist from their Bankers, and therefore suppressed the report as soon as they realized that it might have got into the public realm.

If you want a copy of the pdf,  there is a copy on-line here

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@BitcoinRat  –  sniffing out the News on Bitcoin

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Bitcoin’s Civil War .. whatever will they dream up next ! !

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On the 29th January 2014  Robert  Wile wrote an article entitled – The Emerging Bitcoin Civil War – in Business Insider – link here 

Civil War ? – Very Dramatic Headline – but rather premature.

The Bitcoin Community always has been able to bring together such diverse elements as the original code-writing “geeks”, the radical libertarians , anti-statists, social visionaries, free-enterprise capitalists and proto-anachists alike.
What holds them together isnt politics, but their common understanding that the blockchain protocol and the coming scripting layers that will sit “piggy back” on top of it, are fundamentally going to change the way the World communicates forever.

It is the decentralised, verifiable honesty, of the blockchain that is it real application – not just its use as ‘currency’ ( that will crash to zero ? ? – come on !)  by the way , Mark Williams ( who spoke so disparagingly about Bitcoin ) has actually been predicting the “bubble’ will burst for the last six months. I have even issued a “challenge” on-line to Mr Williams when he predicted .. and I quote … ” Bitcoin will trade for under $10 a share by the first half of 2014, single digit pricing reflecting its option value as a pure commodity play.” So … I have “wagered” Mr Williams my annual salary this year against his, that by April 31st , Bitcoin will be trading at closer to £1,000 than $10 . (So far he has refused to ‘put his wallet where his mouth is’ !)

There are certainly ‘differences of approach’ among Bitcoin advocates. While some of the “Bitcoiners” at the NY meeting are clearly seeking to “couple” bitcoins development to some sort of Federal, Central Bank control, it is also those same “voices” that will gain to make millions from its future development.

If anybody wishes to really understand the clear ‘purity’ of the The Blockchain Protocol, and what it offers to mankind , they should look up the works of Andreas Antonopoulos ( ‏@aantonop on twitter ) and check out his YouTube videos.

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@BitcoinRat    #justsaying