The news has not been good for JP Morgan lately. Let's start with the lawsuit filed against JP Morgan Chase in December 2010 (revealed in Feb 2011) by trustee Irving Picard on behalf of Madoff defendants such as the owner of the NY Mets, HSBC Holdings and UBS AG.
JP Morgan was the main banker for Madoff's firm for more than 20 years. The suit accuses JP Morgan of having significant doubts about Madoff by top level members of the bank including a risk officer as much as 18 months before Madoff was arrested. Worse yet, the suit alleges that the bank sought to make money by offering financial products tied to Mr. Madoff even though the bank had concerns about the legitimacy of his returns.
Does this make them evil? Anyone who has ever worked in banking knows about the principle of "know your customer" to help defend against fraud. There is significant oversight and training that is in place to make sure every employee knows the warning signs. Even though the suit alleges there were alarms going off internally why did it take them so long to report it? Without knowing the details yet we can't speculate but it will be an interesting trial and insight into the bank.
Next let's take the NBC news reports that JP Morgan Chase has admitted overcharging 4,000 military families for their mortgages and improperly foreclosing on 14 service member families. These families are supposed to be protected by the Servicemembers Civil Relief Act.
Marine captain and pilot Johnathan Rowles tells the story of a 5 year battle with JP Morgan even though they had sent copies of active duty orders and never missed a mortgage payment the bank failed to credit them for payments and launched collection agency campaigns that resulted in collector calls 3 times a day including after midnight and even at 4am. Can you imagine treating our countries heroes like this?
Does this make them evil? I would say that to be evil it needs to be intentional and that has not been proven yet but it does appear to make them too big to prevent themselves from committing evil like acts that hurt customers and their own image. Incompetence and poorly run areas would be the alternative if it is not intentional. So is it too big to fail or too big to succeed?
JP Morgan Chase does fund many programs that provide benefit to military families such as the Wounded Warrior Project, Military Warriors Support Foundation and others and yes they will be sending out refunds for the overcharges but all of the good is easily wiped out by every day actions. You also have to wonder if they overcharge military families isn't it still wrong and does it happen to regular citizens?
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