If You’re Baffled as to Why JPMorgan Chase’s Board Hasn’t Sacked Jamie Dimon as the Bank Racked Up 5 Felony Counts – Here’s Your Answer

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by Pam Martens and Russ Martens, Wall St On Parade:

For years we’ve been trying to figure out why JPMorgan’s Board of Directors hasn’t sacked its Chairman and CEO, Jamie Dimon, as the bank racked up two felony counts in 2014 for its failure to alert U.S. regulators to glaring red flags in the bank account it held for Bernie Madoff’s Ponzi scheme; one felony count in 2015 for rigging foreign exchange markets; and two more felony counts just last month for rigging the precious metals and U.S. Treasury market. (The bank admitted to all five counts.) In addition, the bank came under another criminal investigation in 2012 and 2013 when it lost $6 billion of its bank depositors’ money gambling in credit derivatives in London (the London Whale scandal).

Turns out Jamie Dimon has been taking very good care of the Directors on his Board and they have been taking very good care of Dimon – turning him into a billionaire, notwithstanding the worst criminal record of any major  bank in the history of the United States.

The JPMorgan Chase Board of Directors has a stunning number of incestuous conflicts of interest, few of which have not been properly spelled out to shareholders. Others have never been mentioned to shareholders.

Take the case of Stephen Burke, the current Chairman of NBCUniversal and former CEO of NBCUniversal from 2011 to 2019. Burke has sat on the Board of JPMorgan Chase since 2004 as a fixture on the bank’s Compensation and Management Development Committee which has turned Dimon into a billionaire despite the trail of felony counts, criminal fines and scandals under his “leadership.” Also for the past 16 years, Burke has sat on the Board’s Corporate Governance and Nominating Committee and is currently its Chair.

On September 15 of this year, JPMorgan Chase issued a press release stating that “The Board of Directors of JPMorgan Chase & Co. today announced that the independent directors of the Board have appointed Stephen B. Burke as Lead Independent Director, effective January 1, 2021.”

That announcement came more than a month after the Hollywood Reporter wrote that an SEC filing indicated that Burke was to remain an employee of NBCUniversal’s parent, Comcast, under a five-year contract that runs through the end of 2025, with annual compensation of $350,000. Burke has been an employee of Comcast and/or its subsidiary NBCUniversal, for the entire time he has served on the JPMorgan Chase Board.

JPMorgan Chase’s annual proxy statement for years has revealed only the following conflicts of interest for Burke as they relate to his employer: “extensions of credit and other financial and financial advisory products and services provided to NBCUniversal, LLC and Comcast Corporation”; and “local and digital media placements with NBCUniversal and Comcast outlets; telecom data circuits purchased from Comcast.”

Notice, first of all, that there are no dollar amounts assigned to these conflicts. Is JPMorgan Chase providing a few million dollars in credit to Comcast or tens of billions of dollars? Is it buying a few million dollars in advertising from NBCUniversal and Comcast or does it have a renewable long-term ad contract worth tens of millions of dollars? In other words, just how essential to Comcast’s survival or profit picture is funding from JPMorgan Chase?

We can’t answer the second question but we can answer the first. According to SEC filings, JPMorgan Chase has been a joint book-running manager or a co-manager for tens of billions of dollars of notes offered by Comcast for years, including this year. Comcast is now one of the most indebted companies in the U.S. with $105.7 billion in long-term debt according to Global Finance Magazine,

There are other significant conflicts, beginning with the fact that JPMorgan Chase was involved in creating today’s Comcast, advising the company on the purchase of NBCUniversal in 2011. The deal was consummated by JPMorgan Chase’s rainmaker, Jimmy Lee (who passed away in 2015). According to a report at the time in Institutional Investor, Burke was Chief Operating Officer of Comcast at the time and was personally involved in the negotiations with Lee and JPMorgan Chase.

JPMorgan’s proxy does not reveal the following additional conflicts. JPMorgan Chase owns two Dark Pools that actively trade the stock of Comcast in darkness. (A Dark Pool is, effectively, a thinly regulated stock exchange operated internally by a financial institution. Trading data is reported to the public weeks after the fact and is lumped together for an entire week rather than minute by minute during the trading day so that manipulations could be observed.) According to the Dark Pool data from FINRA, Wall Street’s self-regulator, during the month of March of this year, when stocks of all stripes were tanking, including shares of Comcast, JPMorgan’s two Dark Pools (JPM-X and JPB-X) were actively trading in Comcast shares. For the week of March 23, JPMorgan’s two Dark Pools traded more than 3.4 million shares of Comcast in more than 12,000 trades.

Equally problematic, JPMorgan Chase issues ratings from its stock analysts that move stock prices. For example, a “sell” rating on Comcast could plummet the stock price.  According to MarketBeat, JPMorgan Chase has had an “overweight” ranking on Comcast’s stock since October 12, 2018.

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