JPMorgan reaches deal with SEC staff on two mortgage probes

NEW YORK, Thu Nov 8, 2012 – JPMorgan Chase & Co has reached an agreement in principle with the staff of the U.S. Securities and Exchange Commission to resolve two previously disclosed investigations related to mortgage-backed securities, the company disclosed in a quarterly filing on Thursday.

The company did not say how much the settlements could cost. One of the cases is related to disclosures by JPMorgan of delinquencies involving one mortgage-backed securitization. The other case is over multiple securitizations done by Bear Stearns, the failed investment bank that JPMorgan took over in March 2008 during the financial crisis.

The company faces numerous other government investigations and private lawsuits stemming from the financial crisis and from its $6.2 billion trading loss this year on credit derivatives.

JPMorgan loses bid to toss FHFA’s mortgage debt lawsuit

NEW YORK, Mon Nov 5, 2012 – JPMorgan Chase & Co. lost a bid on Monday to win the dismissal of a lawsuit by a U.S. regulator accusing the bank of misleading Fannie Mae and Freddie Mac in buying billions of dollars’ worth of risky mortgage securities.

U.S. District Judge Denise Cote in Manhattan pared down parts of the lawsuit filed by the Federal Housing Finance Agency but allowed other claims to stand.

The case was one of 17 lawsuits that the agency, as conservator for Fannie and Freddie, filed in September 2011 against banks including Bank of America Corp and Citigroup Inc.

Fed examiner replacement hurt JPMorgan supervision: report

NEW YORK, Thu Jul 12, 2012 – The replacement of dozens of New York Federal Reserve bank examiners at JPMorgan Chase & Co. in mid-2011 hindered regulators’ ability to see the mounting risks that left the bank with an estimated $5 billion of trading losses, the New York Times reported.
The regulator replaced “virtually all of its roughly 40 examiners” at the bank to bolster the team and prevent it from becoming too close to JPMorgan executives, the newspaper said, citing current and former government officials who spoke on the condition of anonymity.
The change of the regulatory guard was made over several months, but taxed the ability of the new crew to understand the bank, which has more than $2 trillion of assets on its balance sheet. At the time, JPMorgan’s Chief Investment Office was increasing its bets on credit derivatives and changing a model for measuring risk in the unit.
The New York Fed and JPMorgan declined to comment, the paper said.
A JPMorgan spokesman declined to comment. Officials at the New York Fed did not immediately return Reuters’ calls for comment.
JPMorgan announced on May 10 that it had lost $2 billion on the trades and CEO Jamie Dimon said the losses could increase by $1 billion or more.
On Friday, when the company reports its second-quarter financial results, Dimon has promised to give a more detailed account of the losses and how they happened.

JPMorgan’s internal controls under increased scrutiny, according to report

NEW YORK,Fri Jun 29, 2012 – JPMorgan Chase & Co.’s internal controls have come under increased scrutiny by regulators who have asked the bank to demonstrate its risk models are designed and working properly, the Wall Street Journal reported, citing to people close to the situation.

The bank’s primary regulator, the Office of the Comptroller of the Currency, has requested reviews of models that measure the possible effects of everything from trading losses to interest-rate moves, the Journal said.

In May, the bank’s chief executive, Jamie Dimon, announced the company had lost at least $2 billion through “egregious mistakes” in trading and that the bank had changed its model for measuring so-called value-at-risk in the Chief Investment Office where the derivatives portfolio was managed.

The value-at-risk model, which provides an estimate of how much could be lost on average in a single trading day, is one model under scrutiny, the paper said.

JPMorgan officials were not immediately available for comment outside regular U.S. business hours.

The news comes after a person close to the matter said the disastrous derivatives trades may cause the bank’s losses to rise to $6 billion in the second quarter, far more than the original estimate of at least $2 billion. Other reports have said the loss could reach $9 billion.

The Securities and Exchange Commission is also investigating disclosures on the value-at-risk measuring model change, the Journal said.

Officials from the SEC and the comptroller’s office could not be reached for comment.

JPMorgan, Citi, BofA sued for $949 million by Sealink

NEW YORK –|JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and more than a half dozen other major banks are being hit with a new lawsuit over $949 million in residential mortgage-backed securities.

A summons was filed Tuesday by Sealink Funding Ltd., an Irish entity that oversees risky RMBS, in New York state Supreme Court.

Sealink has filed numerous other lawsuits against major banks over billions in residential mortgage-backed securities it bought.

New York attorney Joel H. Bernstein, who represents Sealink, said the new case is over “securities they have not sued for in the past.”

Sealink claims the purchases were based on faulty offering materials, including misrepresentations of underwriting standards. It seeks damages or to have the purchases rescinded.

Quicksilver Production Partners files for IPO of up to $250 million

FORT WORTH, Texas – Quicksilver Production Partners, formed last year by Quicksilver Resources Inc to acquire oil and gas properties in North America, filed with U.S. regulators to rise up to $250 million through an initial public offering of common units.

The limited partnership did not disclose how many units it planned to sell or their expected price.

In a filing with the U.S Securities and Exchange Commission the firm said J.P. Morgan and Credit Suisse would underwrite the IPO.

It has applied to have its common units listed on the New York Stock Exchange under the symbol “QPP.”

The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.

JPMorgan Q3 trading revenue on track to fall 30 percent

NEW YORK ― JPMorgan Chase & Co’s trading revenue is on track to fall 30 percent this quarter from the second quarter, the bank’s investment banking head said on Tuesday.

Investment banking fees could be about $1 billion, said JPMorgan’s Jes Staley, compared with $1.9 billion in the second quarter.

The European debt crisis and the battle over the U.S. debt ceiling weighed on multiple markets, reducing the value of securities that banks hold in their trading inventories. Trading volume was strong for some products, but mainly in markets where margins are slim for the Wall Street firm, like U.S. Treasuries.

Lower market levels also cut into asset management revenue, and the bank is on track to report a modest loss in its private equity business, Staley said.

Staley is widely seen as a possible successor to Chief Executive Jamie Dimon. The investment bank that Staley oversees is the largest of JPMorgan’s six business segments.

Speaking at a Barclays Capital conference in New York, Staley said the bank is “not worried” about its European loans. JPMorgan is the second-largest U.S. bank with $2.2 trillion of assets.

JPMorgan is usually the first major U.S. bank to report quarterly earnings. Results are next due in October.

JPMorgan shares were up 1.2 percent to $32.81 in late Tuesday morning trade. They are down about 22 percent for the year so far.

Wells Fargo, JPMorgan, Loan Star win Anglo Irish loans: sources

NEW YORK ― Wells Fargo & Co., JPMorgan Chase & Co. and Lone Star Funds were the winners of the $9.5 billion pool of U.S. commercial real estate loan sold by failed lender Anglo Irish Bank Corp., two sources familiar with the deal said.

The sale marks one of the biggest since the downturn in U.S. commercial real estate four years ago.

It attracted more than two dozen buyers, said a source who was not authorized to speak on the record. The total price paid for all the loans was between $7 billion and $8 billion, the source said.

To attract a large pool of potential buyers, the portfolio was broken into eight separate pools according to the performance of the loans and the length to maturity.

The first three pools contained performing loans. JPMorgan was the winner of the first tranche comprising loans with a balance of about $1 billion to $1.5 billion, the source said.

Wells Fargo won the second and third tranches valued at about $3 billion to $3.5 billion, the source said. Wells Fargo recently bought a $1.4 billion performing loan portfolio from the failed Bank of Ireland for about par, another source said.

Global distressed debt and equity investor Lone Star won the remaining five pools of sub-performing and non-performing loans. The five pools have a face value of about $5 billion.

Those loans, which could lead to the buyer either getting the property or restructuring the loans, had attracted other private equity firms, such as TPG Capital LP and Blackstone Group LP.

The winners were notified Thursday night, another source said. Bloomberg first reported the story.

The sales are expected to close in October.

The pools have also been split along the lines of real estate types ― hotels, apartments, condominiums, offices and warehouses, according to an information sheet obtained by Reuters.

Anglo Irish and a spokesman for JPMorgan declined to comment. Representatives from Loan Star and Wells Fargo could not be reached for comment.

Other bidders who were either part of the first or second round of bids included Goldman Sachs Group Inc., Deutsche Bank AG, Vornado Realty Trust, Starwood Capital, and Torchlight Investors, an independent adviser focused on commercial real estate debt investments.

Anglo Irish was one of the most aggressive lenders during the U.S. commercial real estate boom of 2003-2007, but its risk strategy brought it and the Irish economy to the brink of collapse and forced Dublin to seek an 85 billion euros EU-IMF bailout last year.

Once the darling of the Irish stock market, Anglo Irish was nationalized in 2009 and is being wound down, after selling its deposits to former rivals and having ceased lending.

Its U.S. portfolio is its premium stock of assets, and a successful sale would represent a huge boost for the Irish government, which has vowed to radically shrink its banking sector and reduce its reliance on emergency funding from the European Central Bank (ECB).

JPMorgan posts higher quarterly profit, beats estimates

NEW YORK ― JPMorgan Chase & Co. posted higher-than-expected quarterly profit as it wrote off fewer bad mortgages and credit card loans.

JPMorgan, the first big U.S. bank to report second-quarter results, said it earned $5.4 billion, or $1.27 a share. Wall Street analysts, on average, had expected $1.21 per share, according to Thomson Reuters I/B/E/S.

The results compared with year-ago earnings of $4.8 billion, or $1.09 a share.

Chief Executive Jamie Dimon said in the earnings announcement that mortgage costs were down slightly.

“Unfortunately, it will take some time to resolve these issues and it is possible we will incur additional costs along the way,” he added.

This quarter the bank did not have to pay a U.K. tax on bonuses. In the year-earlier period, the tax reduced profits by $550 million, or 14 cents a share.

JPMorgan shares rose 2 percent in premarket trading following the results. Stock futures briefly edged higher, then fell back.