Is JPMorgan Doomed?

By: Korbin Alan Cowger

Whats been done?

Already responsible for a 13 billion dollar settlement
for approving bad mortgages.
Federal Authorities believe JPMorgan purposefully
ignored the actions of Bernie Madoffs Ponzi scheme.
Violates the Bank Secrecy act.

Bernard Madoff
JP Morgan Client.
Known for the
largest fraud in
American history.
More than 15,400
lost their savings.
Led to suicides of
Madoffs loved ones.

Madoffs Victims
http://www.nytimes.
com/packages/html/national/200904_CR
EDITCRISIS/madoff_clients.html

Suspicions
Madoff primarily banked with JPMorgan
for over two decades (since 1986).
Questionable emails between JPMorgan
employees.
JPMorgan made about half a billion in
fees and profits according to Irving H.
Picard.

Picards Case
Sued JPMorgan in 2010 to recover lost savings of
Madoffs victims.
States that JPMorgan funneled billions of dollars for
Madoff and benefitted from it.
The bank pursued derivatives linked to Madoffs
apparent feeder-fund investors.
In 2006, An e-mail between JP employees read I do
have some concerns and questions. after reading
Madoffs tradeoff records.

JPs Investigation
In 2007, after new suspicions of Madoffs scheme, a
senior risk management officer sent out an email to his
colleagues that stated an executive just told me that
there is a well-known cloud over the head of Madoff
and that his returns are speculated to be part of a
Ponzi scheme, I think we owe it to ourselves to
investigate further.
According to Picards case the investigation consisted
of a call to Madoff and a Google search with no follow
up.

Effects on JPMorgan Chase

Reputation shattered.
Prosecutors have had preliminary discussions with
JPMorgan about a deferred prosecution agreement.
JPMorgan would have to pay a fine in order to suspend
these criminal charges.
If they fail, then the charges will not be dropped and
JPMorgan will face further punishment.
JPMorgan employees who did business with Madoff
could also be charged,but it is unclear who is under
investigation

References
http://dealbook.nytimes.
com/2013/10/23/madoff-action-seen-aspossible-for-jpmorgan/?_r=0

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HERBALIFE
Health Food
Protein Shakes
Protein Snacks
Fitness Supplements
Energy Supplements
Weight Loss Products

PYRAMID SCHEME
Allegations in 2011
Sales Force Compensation for Sales & Other Salesmen Recruited
Heavy Weight on Recruitment

KPMG CANCELS AUDITS

Insider Trading by Senior Exec
Scott I. London fired due to allegations
Herbalife performs internal audit

ICAHN VS ACKMAN
Carl Icahn, Icahn Capital Management
Bill Ackman, Pershing Square Management
Ackman believes Herbalife is a pyramid scheme
Icahn prospers, Ackman down 300,000,000

HERBALIFE TRIUMPHS
19 Straight Quarters ahead of predictions
$152.1 million profit 2013 Q3
$111.9 million profit 2012 Q3
Revenue up 19.2%
Share Price doubled in 1 year

REFERENCES
http://blogs.wsj.com/moneybeat/2013/10/28/herbalife-makes-it-19-in-a-row/

http://online.wsj.com/news/articles/SB10001424127887323838204578654082809374320