JPMorgan Chase’s Ugly Family Secrets Revealed

ChaseMatt Taibbi writes in Rolling Stone:

In a story that should be getting lots of attention, American Banker has released an excellent and disturbing exposé of J.P. Morgan Chase’s credit card services division, relying on multiple current and former Chase employees. One of them, Linda Almonte, is a whistleblower whom I’ve known since last September; I’m working on a recount of her story for my next book.

One of the things we were promised by the lawmakers who passed the Dodd-Frank reform bill a few years back is that this would be a new era for whistleblowers who come forward to tell the world about problems in our financial infrastructure. This story now looms as a test case for that proposition. American Banker reporter Jeff Horwitz did an outstanding job in this story detailing the sweeping irregularities in-house at Chase, but his very thoroughness means the news may have ramifications for Linda, which is why I’m urging people to pay attention to this story in the upcoming weeks.

The Cliff’s Notes version of the story goes something like this: Late in 2009, Chase’s credit card services division sold a parcel of nearly $200 million worth of credit card judgments to a debt collector at a discount. This common practice in the credit-card industry is a little like a bookie selling the outstanding debts of his delinquent gamblers to a leg-breaker for 25 cents on the dollar. If the leg-breaker gets half the delinquents to pay, the deal works out for both sides — the bookie gets 25 percent of money he wasn’t going to collect, and the leg-breaker makes a 100 percent profit.

Read more: >Rolling Stone

3 Comments on "JPMorgan Chase’s Ugly Family Secrets Revealed"

  1. Liam_McGonagle | Mar 25, 2012 at 3:06 pm |

    The auditors didn’t have to look at a $200 million transaction?  Or maybe they did, and their failure will just be tolerated–like it was in the MF Global debacle, where the hedge fund couldn’t account for $1.6 billion that were legally required to be segregated for customer benefit.

    I say we charge JP Morgan Chase under one of the plethora of recent anti-terrorism laws.  How do we know Chase and the likes aren’t allowing Hamas, Iran’s Guardian’s of the Islamic Revolution, etc. to launder money and fund terrorism if they can’t account for it?

    I forsee a lengthy stay in the Guantanamo Hilton for Jamie Dimon.

    • Their work in squandering money, or outright stealing it is an act that purposefully destabilizes society. That is terrorism all by itself.

  2. Izraulhidashi | Oct 4, 2012 at 6:55 am |

    i wonder if this has to do with the dragon family lawsuit? I bet it does.

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