Revealed: JPMorgan Paid $190,000 Annually to Spouse of Bank's Top Regulator
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In this case, the top official of the regulatory body overseeing JPMorgan Chase, was receiving $190,000 per year in household income from the bank he was supervising. If Dudley was the named beneficiary of his wife’s assets, he had a current interest in $1.75+ million from JPMorgan Chase.
These conflicts were clearly known to the top two lawyers at the New York Fed on the date of this letter, January 22, 2009, two years after Dudley began his employment at the New York Fed. On February 16, 2011, Martin C. Grant, the Chief Compliance and Ethics Officer of the regulator, wrote to the Assistant General Counsel, Cary Williams, at the Board of Governors of the Federal Reserve System in Washington, D.C., providing the 2009 financial disclosure reports for Dudley.
That letter reads in part: “Enclosed for your and Chairman Bernanke’s review are the 2009 confidential Financial Disclosure Reports filed by the President…These reports are provided to you for your review, with the understanding that they will be reviewed only by you and Chairman Bernanke, and that they remain the property of the FRBNY. It is the FRBNY’s position that the reports and any information contained in the reports are exempt from public disclosure under the Freedom of Information Act…”
In a statement on the New York Fed’s web site dated January 31, 2012, there is no reference to any waiver ever being granted for Dudley on his spouse’s income and assets at JPMorgan, although other specific waivers are mentioned. When the 2010 financial forms were filed by Dudley, Ann Darby’s holdings at JPMorgan remained on the statements. The 2010 financial disclosures are the most recent filings available.
In addition to the DOJ and FBI probe here in the U.S. for gambling with insured deposits, JPMorgan is now under a criminal probe in Canada for rigging Libor interest rates and a Federal Energy Regulatory Commission (FERC) probe for rigging electric rates in California and the Midwest. On March 15 of this year, Judge Simone Luerti in Milan, Italy set a trial date of May 6 for fraud charges to commence against JPMorgan and three other banks (Deutsche Bank, UBS AG, and Depfa Bank) over alleged derivatives fraud. Prosecutors in Milan accused the four banks of misrepresenting the deals to city officials and earning $128 million in hidden fees.
Against this backdrop, we learned last week that a trade association for bankers (a trade association for bankers!) the British Bankers Association (BBA), is the overseer of a globally rigged system for setting interest rates (Libor) that impact over $10 trillion in consumer loans and $350 trillion of interest rate derivatives purchased by municipalities around the globe; towns from Alabama to Saint-Étienne, France, pillaged and looted by a morally bankrupt band of insatiable financial locusts.
Here is what the British Bankers Association – the group overseeing interest rates that impact everything from adjustable rate mortgages in the U.S. to what municipalities receive, or owe, in interest payments around the globe – says it does on its web site: “We promote a legislative and regulatory system for banking and financial services – in the UK, Europe and internationally – which takes account of our members’ needs and concerns and provides an effective and competitive market place in which their businesses can prosper.”
Here is how the New York Fed defines its regulatory regime under the title “Relationship Management”: “Examiners serve as relationship specialists, financial analysts or surveillance analysts, and focus on large foreign banks, other foreign banks, large domestic banks, regional banks or community banks.” Relationship management is not how the public wants its regulators and prosecutors of financial fraud to function but that is precisely what we have today: handholding and slaps on the wrist.