Aug 9, 2012
Chase Bank In Trouble
The biggest bank in the U.S. is one of 16 under investigation for manipulating Libor
If you bank with JPMorgan Chase (as I do) you may want to start looking for a new bank.
It looks like the biggest bank in the U.S. is about to get hit very hard by the Libor scandal. That means they could be paying out a record fine and when Chase loses money they have a nasty habit of trying to make it back by gouging their customers.
If you haven’t been following the Libor scandal in the news, I wrote about it last month in a post called “Barclays Rips Off Its Customers – Your Bank Probably Does, Too”—and it looks like the chickens are about to come home to roost.
According to a filing this morning from the Securities and Exchange Commission (SEC) JPMorgan has received “subpoenas and requests for documents and, in some cases, interviews, from the DOJ, CFTC, SEC, European Commission, UK Financial Services Authority, Canadian Competition Bureau, Swiss Competition Commission and other regulatory authorities and banking associations around the world.”
The alphabet boys in question are the Department of Justice, Commodity Futures Trading Commission and of course the Securities and Exchange Commission. They are ALL heavy hitters and from the look of things they mean business.
JPMorgan is one of 16 banks under investigation for manipulating Libor. The bank has already lost $5 billion this year from bad trading and that loss could turn into a $9 billion loss before it’s all over. The company also received requests for information about its involvement in setting Euribor and Tibor, the European and Japanese versions of Libor.
Last year, after the passage of the Dodd-Frank financial reform bill, Chase did away with free checking accounts for its customers and imposed $10 monthly fees on basic checking accounts. Some customers were able to avoid those fees, but given the bank’s history and the size of the fines—Barclays had to pay a $448 million fine—Chase customers could very well feel the pinch soon.