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Tag: JPMorgan Chase & Co

  • Get hotel credit, room upgrades and free Wi-Fi with Capital One’s new Lifestyle Collection

    Get hotel credit, room upgrades and free Wi-Fi with Capital One’s new Lifestyle Collection

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    Capital One Lifestyle Collection

    When you book a hotel through Capital One’s Lifestyle Collection you can take advantage of the following benefits:

    • $50 experience credit for food, drinks or other activities
    • Complimentary Wi-Fi
    • Room upgrades (when available)
    • Early check-in and late check-out (when available)

    These perks only marginally improve on what you could receive when you have basic or mid-tier elite status with that particular hotel or hotel chain, but this could be a useful benefit for hotel brands you visit less frequently. The Lifestyle Collection includes hotel chains such as The LINE, Virgin Hotels, Design Hotels, and The Standard, as well as independent locations.

    The Lifestyle Collection is available to select Capital One cardholders and these bookings earn bonus rewards depending on which card you have. You can earn 10X miles for Lifestyle Collection bookings you make with the Capital One Venture X Rewards Credit Card and 5X miles with the Capital One Venture Rewards Credit Card. Venture X cardholders also can redeem their $300 annual travel credit on Lifestyle Collection bookings.

    Capital One Venture X Rewards Credit Card

    Information about the Capital One Venture X Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      10 Miles per dollar on hotels and rental cars, 5 Miles per dollar on flights when booked via Capital One Travel; unlimited 2X miles on all other eligible purchases

    • Welcome bonus

      Earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months from account opening

    • Annual fee

    • Intro APR

    • Regular APR

      21.74% – 28.74% variable APR

    • Balance transfer fee

      0% at the regular transfer APR

    • Foreign transaction fees

    • Credit needed

    Capital One Venture Rewards Credit Card

    Information about the Capital One Venture Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    • Rewards

      5 Miles per dollar on hotel and rental cars booked through Capital One Travel, 2X miles per dollar on every other purchase

    • Welcome bonus

      Earn 75,000 bonus miles once you spend $4,000 on purchases within 3 months from account opening

    • Annual fee

    • Intro APR

      N/A for purchases and balance transfers

    • Regular APR

    • Balance transfer fee

      0% at the regular transfer APR

    • Foreign transaction fee

    • Credit needed

    Capital One Travel Premier Collection

    The Premier Collection is a step up from the Lifestyle Collection, but it’s only available to Capital One Venture X Rewards Credit Card and Capital One Venture X Business cardholders. The upgraded benefits include:

    • $100 experience credit (or the local equivalent) to use on dining, spa, and other activities
    • Daily breakfast for two
    • Complimentary Wi-Fi
    • Early check-in, late check-out and a room upgrade (when available)

    The Premier Collection encompasses many luxury hotels you can book through Capital One Travel, such as Small Luxury Hotels, The Leading Hotels of the World and Six Senses.

    Capital One Lifestyle Collection alternatives

    American Express® Gold Card

    On the American Express secure site

    • Rewards

      4X Membership Rewards® points at Restaurants (plus takeout and delivery in the U.S.) and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on amextravel.com, 1X points on all other purchases

    • Welcome bonus

      Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases within the first 6 months of card membership

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    If you have a premium American Express card, such as The Platinum Card® from American Express, you’ll be able to take advantage of the Fine Hotels and Resorts program (FHR) in addition to The Hotel Collection. FHR offers more robust benefits and is comparable to Capital One’s Premier Collection. Terms apply.

    Citi

    The Citi Hotel Collection is available through the new Citi Travel Portal and is open to all cards that earn Citi ThankYou points, including no-annual-fee cards like the Citi® Double Cash Card (see rates and fees). Citi Hotel Collection benefits include:

    • Daily breakfast for two people
    • Free Wi-Fi
    • Early check-in and late check-out (when available)

    For those with Citi Premier® Card and Citi Prestige® Card (no longer available to new applicants), you’ll have access to Citi’s Luxury Collection perks on top of the Hotel Collection benefits. To use either of these benefits, you’ll need to search for hotels through the Citi Travel Portal. Within the search results, eligible hotels will be labeled with Hotel Collection or Luxury Collection tags.

    Citi Premier® Card

    • Rewards

      3X points per $1 spent at restaurants, supermarkets, gas stations, and on hotels and air travel, 1X points on all other purchases

    • Welcome bonus

      Earn 60,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening. Plus, for a limited time, earn a total of 10 ThankYou® Points per $1 spent on hotel, car rentals, and attractions (excluding air travel) booked on the Citi Travel℠ portal through June 30, 2024.

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

      5% of each balance transfer, $5 minimum

    • Foreign transaction fee

    • Credit needed

    Chase Sapphire Reserve®

    • Rewards

      Earn 5X total points on flights and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining & 1 point per $1 spent on all other purchases plus, 10X points on Lyft rides through March 2025

    • Welcome bonus

      Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $900 toward travel when you redeem through Chase Ultimate Rewards®

    • Annual fee

    • Intro APR

    • Regular APR

    • Balance transfer fee

    • Foreign transaction fee

    • Credit needed

    Subscribe to the CNBC Select Newsletter!

    Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.

    Bottom line

    For rates and fees of the American Express® Gold Card, click here.

    Information about the Capital One Venture X Business, Spark Miles for Business, Citi Prestige® Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

    Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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  • Billionaire killed in race car crash | CNN Business

    Billionaire killed in race car crash | CNN Business

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    Washington, DC
    CNN
     — 

    James Crown, a billionaire businessman who held several leadership roles including board member of JPMorgan Chase, died Sunday in a racing accident in Colorado.

    Crown, who also turned 70 on Sunday, died in the single-vehicle crash after colliding with an impact barrier at Aspen Motorsports Park in Woody Creek, Colorado, The Colorado Sun reported.

    Among his many roles, Crown was chairman and CEO of his family business, the investment firm Henry Crown and Company. In addition to serving on the JPMorgan board, he was also a board director at General Dynamics. Crown had served on JPMorgan’s board since the early 1990s.

    “We extend our deepest condolences to Jim’s family and loved ones during this incredibly difficult time,” Jamie Dimon, CEO of JPMorgan Chase, said in a statement. “Our thoughts are also with all of you who knew and loved Jim, as much as I did. He was an integral part of JPMorgan Chase and our lives, and his presence will be deeply missed.”

    “The Crown family is deeply saddened by the sudden passing of Jim Crown,” a family representative said in a statement to media. “The family requests that their privacy be respected at this difficult time.”

    Crown lived in Chicago but frequently traveled to Colorado, and he held additional positions at organizations in both states. He was a managing partner of Aspen Skiing Co., chair emeritus of the Aspen Institute and a trustee at three institutions: the Museum of Science and Industry, the Civic Committee and the University of Chicago. In 2014, President Barack Obama appointed Crown to the President’s Intelligence Advisory Board.

    Local officials are currently investigating the crash.

    “The official cause of death is pending autopsy although multiple blunt force trauma is evident. The manner is accident,” the Pitkin County Coroner’s Office said in a news release.

    Forbes estimated the Crown family’s wealth at $10.2 billion in 2020.

    Crown is survived by his wife, four children and his parents.

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  • SEC fines JPMorgan subsidiary for deleting 47 million emails, some related to subpoenas

    SEC fines JPMorgan subsidiary for deleting 47 million emails, some related to subpoenas

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    The Securities and Exchange Commission fined the broker-dealer subsidiary of JPMorgan Chase $4 million for accidentally deleting about 47 million emails from early 2018, according to an administrative order Thursday.

    Some of those deleted emails were sought by subpoenas in at least a dozen regulatory investigations, but could no longer be retrieved, the SEC order against J.P. Morgan Securities LLC noted.

    Others “could relate to potential future investigations, legal matters and regulatory inquiries,” the order said.

    The emails, which were accidentally deleted in 2019, were from and to about 8,700 email boxes, which included those of up to 7,500 employees who had regular contact with Chase customers.

    Many of the emails were “business records required to be retained pursuant” to federal securities law, the order said.

    J.P. Morgan Securities consented to the SEC sanction, which also censured the firm.

    The firm had submitted a settlement offer in anticipation of administrative proceedings related to the deletions, and the SEC accepted that offer.

    The SEC also ordered the firm to “cease and desist from committing any future violations” of the securities law requiring broker-dealers to retain for at least three years the originals of all communications.

    This is the third time the investment advisor has agreed to punishment for failing to preserve electronic records.

    The firm in late 2021 agreed to pay $125 million in penalties for failing to preserve text messages and other electronic communications sent between January 2018 and November 2020.

    In 2005, the firm paid $700,000 in penalties for not preserving electronic records from mid-1999 to mid-2002.

    JPMorgan spokeswoman Patricia Wexler declined to comment on the latest sanction.

    In its order Thursday, the SEC noted JPMorgan in 2016 began a project “to delete from its system older communications and documents no longer required to be retained.”

    Those messages included old emails, instant messages and communications sent over the Bloomberg terminal service.

    But there were “glitches” in the project, “with the identified documents not, in fact, being expunged,” the order said.

    While troubleshooting that issue in June 2019, employees of the firm “executed deletion tasks on electronic communications from the first quarter of 2018,” the order said.

    Those employees “erroneously” believed — based on claims by the firm’s archiving vendor — that all of those documents were coded in a way to prevent the permanent deletion of those records that were required by law to be kept for three years, the order said.

    “In fact, however, the vendor did not apply the default retention settings in a particular email domain,” the order said.

    “And those communications, including many required to be maintained pursuant to the broker-dealer recordkeeping rules, were permanently deleted.”

    Those deletions were discovered in October 2019, when a JPMorgan team responsible for producing records related to legal cases detected that emails were missing from early 2018, the order said.

    JPMorgan reported the deletions to the SEC in January 2020.

    The order noted that, “In at least twelve civil securities-related regulatory investigations, eight of which were conducted by the [SEC] Commission staff, JPMorgan received subpoenas and document requests for communications which could not be retrieved or produced because they had been deleted permanently.”

    And, the order added, “JPMorgan notified only one of the eight investigative teams at the Commission that its production in response to the subpoenas had been compromised by the 2019 deletion event.”

    The order noted that because the deleted communications “are unrecoverable, it is unknown – and unknowable – how the lost records may have affected the regulatory investigations.”

    In fact, a member of JPMorgan’s compliance department acknowledged in an internal email after the deletions came to light that “lost documents could relate to potential future investigations, legal matters and regulatory inquiries,” the order said.

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  • Why Charles Schwab became a financial ‘supermarket’

    Why Charles Schwab became a financial ‘supermarket’

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    Charles Schwab Corp. is the largest publicly traded brokerage business in the United States with $7.5 trillion of client assets, and is a leading service provider for financial advisors, among the top exchange-traded fund asset managers and one of the biggest banks.

    “It would be fair to characterize Charles Schwab as a financial services supermarket,” Michael Wong, director of North American equity research and financial services at Morningstar, told CNBC. “Anything that you want, you can find in Charles Schwab’s platform.”

    Over the decades, Charles Schwab helped usher in a low-cost investing revolution while surviving market crashes and fierce competition — even when the game was taken up a notch to zero-fee commissions in 2019. 

    “Inherently, this is a scale business. The larger you are, the more efficient you are from an expense perspective,” Alex Fitch, portfolio manager for the Oakmark Select Fund and the Oakmark Equity and Income Fund, which invests in Charles Schwab, told CNBC. “It enables you to cut prices.”

    Various facets of Charles Schwab’s business compete against many legacy full-service brokers and investment bankers, including Fidelity, Edward Jones, Interactive Brokers, Stifel, JPMorgan, Morgan Stanley and UBS. And, it has to battle in the financial tech market against companies like Robinhood, Ally Financial and SoFi. 

    The melee reached a turning point in 2019 when Charles Schwab announced it was slashing commissions for stock, ETF and options trades to zero, matching the fees offered by Robinhood when it entered the market in 2014.

    Quickly, other companies followed suit and cut fees, which damaged TD Ameritrade’s business enough that Charles Schwab ended up acquiring it in a $26 billion all-stock deal less two months later.

    Charles Schwab was among the firms that benefited from the growth of retail investing during the coronavirus pandemic, and it’s now facing the consequences of Federal Reserve’s aggressive interest rate hikes. 

    That’s because of Charles Schwab’s huge banking business that generates revenue from sweep accounts, which are when the firm uses money leftover in investors’ portfolios and reinvests it in securities, like government bonds, to help turn a profit. 

    Charles Schwab told CNBC it was unable to participate in this documentary.

    Watch the video above to learn more about how Charles Schwab battled the ever-evolving financial services market – from fees to fintech – and how the reward doesn’t come without the risk. 

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  • ‘Is this real?’ JPMorgan court filing shows Frank employees questioned stats before acquisition

    ‘Is this real?’ JPMorgan court filing shows Frank employees questioned stats before acquisition

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    Charlie Javice, who is charged with defrauding JPMorgan Chase & Co into buying her now-shuttered college financial aid startup Frank for $175 million in 2021, arrives at United States Court in Manhattan in New York City, June 6, 2023.

    Mike Segar | Reuters

    Employees of a startup purchased by JPMorgan Chase expressed disbelief when the company’s founder directed them to boost their customer count ahead of the acquisition, according to internal messages released Thursday in a legal filing.

    The founder, Charlie Javice, instructed employees to change “public-facing numbers” of college aid platform Frank to 4.25 million customers in January 2021, JPMorgan alleged in the filing. Frank had fewer than 300,000 real customers when JPMorgan bought it in September 2021, the bank has alleged.

    “Do we really have 4.25M students?” one Frank employee asked in a January 2021 Slack thread.

    “Is this real?” another asked.

    “Charlie is king of finding magic numbers,” wrote another employee, whose names were redacted in the filing.

    The release of private staff messages is part of the latest salvo in the legal dispute between Javice and JPMorgan, which paid $175 million for the startup. JPMorgan, the biggest U.S. bank by assets and a steady acquirer of fintech startups, sued Javice in December 2022, alleging that the founder had lied about her company’s scale to close the deal.

    According to Thursday’s filing, Javice justified the change in user stats by telling employees that website visitors counted as customers, the bank alleged.

    In its original suit, JPMorgan alleged that Javice hired a data science professor to concoct fake accounts after an employee refused to do so.

    Javice’s problems have intensified in recent weeks. In April, the startup founder was criminally charged by the Department of Justice and sued by the Securities and Exchange Commission, both which accused her of fraud related to the company sale.

    Javice has said in court filings that JPMorgan knew how many users Frank had and that the bank sought to blame her for its mistakes.

    A lawyer for Javice didn’t immediately respond to messages left late Thursday.

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  • Goldman Sachs isn’t just spinning records it’s breaking records, says Wells Fargo’s Mike Mayo

    Goldman Sachs isn’t just spinning records it’s breaking records, says Wells Fargo’s Mike Mayo

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    Mike Mayo, Wells Fargo managing director, joins ‘Last Call’ to discuss a new Wall Street Journal report that Goldman Sachs CEO David Solomon may be the target of continuing frustration inside the company.

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  • CNBC Daily Open: Tech is loving the possible rate pause

    CNBC Daily Open: Tech is loving the possible rate pause

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    Tim Cook, chief executive officer of Apple Inc., beside an Apple Vision Pro mixed reality (XR) headset during the Apple Worldwide Developers Conference at Apple Park campus in Cupertino, California, US, on Monday, June 5, 2023.

    Philip Pacheco | Bloomberg | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    • China’s economy and stocks aren’t doing as hot as Japan’s. The Shanghai Composite fell around 0.1% and the yuan hit a 6-month low as the People’s Bank of China cut a short-term borrowing rate in an attempt to boost liquidity. Analysts think it’s a signal that the central bank will cut its medium-term and loan prime rate in the weeks ahead.
    • Goldman Sachs CEO David Solomon told CNBC that commercial real estate’s in such a bad shape that his bank will write down bad loans and drop valuations in its real estate investments. Still, Solomon said he’s “surprised” by the resilience of the U.S. economy.
    • JPMorgan Chase’s prepared to pay $290 million to settle a lawsuit brought against it by a victim of late sexual predator Jeffrey Epstein, a source told CNBC. However, the bank’s litigation with the U.S. Virgin Islands and its claims against Jes Staley, a former executive who was friends with Epstein, are still pending.

    The bottom line

    Hopes for a pause in interest rates helped to send stocks higher Monday. The technology sector, which is more sensitive to rate fluctuations, especially benefitted. (Higher rates today lower the value of tech’s growth tomorrow.)

    Traders are betting there’s a 72% chance the Federal Reserve will keep rates unchanged at this week’s meeting, according to the CME Group’s FedWatch tool. That’s because economists think the consumer price index, coming out later today, will show May’s inflation slowing to just 0.1% from the previous month, or 4% year over year. That’s a “headline number [that] is going to feel good,” said Mark Zandi, chief economist at Moody’s Analytics.

    Big Tech stocks mostly rose at least 1%; Apple even hit an all-time high of $183.79 per share. Meanwhile, Oracle’s better-than-expected earnings report pushed its shares 3% higher in extended trading.

    The Nasdaq popped 1.53% to reach its highest level since April. The S&P 500 added 0.93%, further adding to the gains it’s accumulated over the past few days, and the Dow Jones Industrial Average climbed 0.56%.

    Despite those big moves, it was a relatively light trading day. On an average day, 80.6 million shares of the SPDR S&P 500 ETF Trust, a tracker of the broad S&P 500 index, are traded. Yesterday, only 31.5 million exchanged hands. That’s probably wise, considering inflation data coming out tomorrow and the Fed meeting happening right after that. Tech greatly benefits from lower interest rates, but remember that the converse applies too.

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  • JPMorgan prepared to pay $290 million in settlement with Jeffrey Epstein victims

    JPMorgan prepared to pay $290 million in settlement with Jeffrey Epstein victims

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    JPMorgan Chase is prepared to pay $290 million to resolve claims by victims of the late sexual predator Jeffrey Epstein, a person familiar with the matter told CNBC on Monday.

    The settlement does not include an admission of liability by the bank, the person said.

    The announcement of the settlement came just hours before a judge ruled that the case in U.S. District Court in Manhattan can proceed as a class-action lawsuit. The bank did not include details about the agreement in that announcement. The person familiar with the deal requested anonymity to discuss the details of the settlement.

    “The parties in Jane Doe 1 v. JPMorgan Chase Bank, N.A. have informed the Court that they have reached an agreement in principle to settle the putative class action lawsuit related to Jeffrey Epstein’s crimes, which is subject to court approval,” the bank said in a news release earlier Monday morning.

    “The parties believe this settlement is in the best interests of all parties, especially the survivors who were the victims of Epstein’s terrible abuse,” JPMorgan added.

    The settlement announcement comes one month after Deutsche Bank, where Epstein became a client after he was forced out by JPMorgan in 2013, settled with Epstein victims for $75 million. JPMorgan’s litigation with the U.S. Virgin Islands is ongoing.

    Monday’s settlement stems from claims filed last year by an unnamed woman, using the pseudonym Jane Doe, that the bank knowingly benefited from and facilitated Epstein’s sex trafficking operation. The woman, who alleges she was raped and trafficked, sued on behalf of a “large number” of other victims of that operation.

    “We all now understand that Epstein’s behavior was monstrous, and we believe this settlement is in the best interest of all parties, especially the survivors, who suffered unimaginable abuse at the hands of this man,” JPMorgan said in a separate statement Monday morning.

    “Any association with him was a mistake and we regret it. We would never have continued to do business with him if we believed he was using our bank in any way to help commit heinous crimes,” the bank said.

    Brad Edwards, an attorney for the lead plaintiff in the case, lauded the “enormously valuable” support the Virgin Islands provided to Epstein’s victims. “We recognize the importance of the government’s continued litigation against JPMorgan Chase to prevent future crimes,” Edwards said in a statement.

    In a court opinion posted later Monday morning, Judge Jed Rakoff wrote that the plaintiffs meet the requirements to form a class-action suit.

    The judge wrote that the pool of alleged victims in the case likely exceeds the 40-person threshold for class certification, rebuffing JPMorgan’s calculation of 32 people with viable claims.

    “Even if the proposed class is restricted to people who were sexually abused or trafficked by Jeffrey Epstein after JP Morgan, allegedly, either knew or should have known of Epstein’s sex-trafficking venture, the class likely contains well over 40 people,” Rakoff wrote.

    JPMorgan remains headed for an Oct. 23 trial with the U.S. Virgin Islands in its lawsuit over the bank’s relationship with Epstein. JPMorgan’s claims against former executive Jes Staley, who was friends with Epstein, are also active, the bank said. JPMorgan argues that Staley is responsible for any civil liability a jury might find in the Epstein case. It is also looking to claw back more than $80 million in pay from the former executive.

    “We are gratified to hear about the settlement that will provide victims of Jeffrey Epstein some compensation for JPMorgan Chase’s role in facilitating Epstein’s crimes against them,” a spokesperson for the Virgin Islands attorney general said in a statement.

    “The U.S. Virgin Islands will continue to proceed with its enforcement action to ensure full accountability for JPMorgan’s violations of law and prevent the bank from assisting and profiting from human trafficking in the future. The U.S Virgin Islands is committed to protecting women and girls who could otherwise become victims going forward,” the spokesperson said.

    The victim and the Virgin Islands, where Epstein owned a private island where he would sexually abuse girls, both claim JPMorgan continued working with Epstein after learning he had been a predator, and facilitated his sex trafficking crimes. The Virgin Islands’ government, however, is pushing forward, pointing to multiple new exhibits featuring email chains that show more concern within the bank about Epstein than was previously known, especially among its legal and compliance staff.

    The announcement comes more than a week after JPMorgan CEO Jamie Dimon gave a deposition in the Epstein cases. On Friday, lawyers for the Epstein victim, called Jane Doe 1 in documents, asked the court to reopen Dimon’s deposition.

    The accuser’s lawyers also sought to reopen the depositions of Mary Erdoes, who is CEO of JPMorgan’s asset and wealth management division; Mary Casey, who was Epstein’s banker for about a decade at JPMorgan; and a fourth person, only identified in the filing as JPMorgan’s “representative.” All four would be asked about documents turned over after their initial depositions, according to a filing.

    JPMorgan has denied wrongdoing and says it regrets having had Epstein as a client. Dimon had said he barely knew of Epstein until 2019, when federal authorities arrested him.

    One of the late-produced documents was a timeline that referenced emails in which Staley, the one-time JPMorgan executive, asks Epstein a question. (Staley left another big bank, Barclays, in late 2021 after a probe into his Epstein relationship.)

    “Plaintiff would have confronted JPMC’s CEO, Mr. Dimon, with this document during his deposition had it been produced in a timely manner,” a legal filing said.

    JPMorgan has said Dimon did not review Epstein’s accounts when he was a client there from 1998 through 2013, which is when JPMorgan severed its relationship with him. That termination happened years after multiple concerns were raised within the bank about keeping him as a client and five years after he pleaded guilty to a Florida state charge of soliciting sex from a minor.

    Epstein died in 2019 from suicide in a New York jail, weeks after federal authorities charged him with trafficking girls for sex.

    Despite his criminal history, Epstein nonetheless cultivated friendships and relationships among the richest, most powerful people in the world, including Microsoft co-founder Bill Gates, Prince Andrew of the U.K. and former Presidents Bill Clinton and Donald Trump.

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  • JPMorgan bond chief Bob Michele sees worrying echoes of 2008 in market calm

    JPMorgan bond chief Bob Michele sees worrying echoes of 2008 in market calm

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    Bob Michele, Managing Director, is the Chief Investment Officer and Head of the Global Fixed Income, Currency & Commodities (GFICC) group at JPMorgan.

    CNBC

    To at least one market veteran, the stock market’s resurgence after a string of bank failures and rapid interest rate hikes means only one thing: Watch out.

    The current period reminds Bob Michele, chief investment officer for JPMorgan Chase‘s massive asset management arm, of a deceptive lull during the 2008 financial crisis, he said in an interview at the bank’s New York headquarters.

    “This does remind me an awful lot of that March-to-June period in 2008,” said Michele, rattling off the parallels.

    Then, as now, investors were concerned about the stability of U.S. banks. In both cases, Michele’s employer calmed frayed nerves by swooping in to acquire a troubled competitor. Last month, JPMorgan bought failed regional player First Republic; in March 2008, JPMorgan took over the investment bank Bear Stearns.

    “The markets viewed it as, there was a crisis, there was a policy response and the crisis is solved,” he said. “Then you had a steady three-month rally in equity markets.”

    The end to a nearly 15-year period of cheap money and low interest rates around the world has vexed investors and market observers alike. Top Wall Street executives, including Michele’s boss Jamie Dimon, have raised alarms about the economy for more than a year. Higher rates, the reversal of the Federal Reserve’s bond-buying programs and overseas strife made for a potentially dangerous combination, Dimon and others have said.

    But the American economy has remained surprisingly resilient, as May payroll figures surged more than expected and rising stocks caused some to call the start of a fresh bull market. The crosscurrents have divided the investing world into roughly two camps: Those who see a soft landing for the world’s biggest economy and those who envision something far worse.

    Calm before the storm

    For Michele, who began his career four decades ago, the signs are clear: The next few months are merely a calm before the storm. Michele oversees more than $700 billion in assets for JPMorgan and is also global head of fixed income for the bank’s asset management arm.

    In previous rate-hiking cycles going back to 1980, recessions start an average of 13 months after the Fed’s final rate increase, he said. The central bank’s most recent move happened in May.

    In that ambiguous period just after the Fed has finished raising rates, “you’re not in a recession; it looks like a soft landing” because the economy is still growing, Michele said.

    “But it would be a miracle if this ended without recession,” he added.

    The economy will probably tip into recession by the end of the year, Michele said. While the downturn’s start could get pushed back, thanks to the lingering effects of Covid stimulus funds, he said the destination is clear.

    “I’m highly confident that we’re going to be in recession a year from now,” he said.

    Rate shock

    Other market watchers do not share Michele’s view.

    BlackRock bond chief Rick Rieder said last month that the economy is in “much better shape” than the consensus view and could avoid a deep recession. Goldman Sachs economist Jan Hatzius recently dialed down the probability of a recession within a year to just 25%. Even among those who see recession ahead, few think it will be as severe as the 2008 downturn.

    To start his argument that a recession is coming, Michele points out that the Fed’s moves since March 2022 are its most aggressive series of rate increases in four decades. The cycle coincides with the central bank’s steps to rein in market liquidity through a process known as quantitative tightening. By allowing its bonds to mature without reinvesting the proceeds, the Fed hopes to shrink its balance sheet by up to $95 billion a month.

    “We’re seeing things that you only see in recession or where you wind up in recession,” he said, starting with the roughly 500-basis point “rate shock” in the past year.

    Other signs pointing to an economic slowdown include tightening credit, according to loan officer surveys; rising unemployment filings, shortening vendor delivery times, the inverted yield curve and falling commodities values, Michele said.

    Pain trade

    The pain is likely to be greatest, he said, in three areas of the economy: regional banks, commercial real estate and junk-rated corporate borrowers. Michele said he believes a reckoning is likely for each.  

    Regional banks still face pressure because of investment losses tied to higher interest rates and are reliant on government programs to help meet deposit outflows, he noted.

    “I don’t think it’s been fully solved yet; I think it’s been stabilized by government support,” he said.

    Downtown office space in many cities is “almost a wasteland” of unoccupied buildings, he said. Property owners faced with refinancing debt at far higher interest rates may simply walk away from their loans, as some have already done. Those defaults will hit regional bank portfolios and real estate investment trusts, he said.

    A woman wearing her facemask walks past advertising for office and retail space available in downtown Los Angeles, California on May 4, 2020.

    Frederic J. Brown | AFP | Getty Images

    “There are a lot of things that resonate with 2008,” including overvalued real estate, he said. “Yet until it happened, it was largely dismissed.”

    Last, he said below investment grade-rated companies that have enjoyed relatively cheap borrowing costs now face a far different funding environment; those that need to refinance floating-rate loans may hit a wall.

    “There are a lot of companies sitting on very low-cost funding; when they go to refinance, it will double, triple or they won’t be able to and they’ll have to go through some sort of restructuring or default,” he said.

    Ribbing Rieder

    Given his worldview, Michele said he is conservative with his investments, which include investment grade corporate credit and securitized mortgages.

    “Everything we own in our portfolios, we’re stressing for a couple quarters of -3% to -5% real GDP,” he said.

    That contrasts JPMorgan with other market participants, including his counterpart Rieder of BlackRock, the world’s biggest asset manager.

    “Some of the difference with some of our competitors is they feel more comfortable with credit, so they are willing to add lower-rate credits believing that they’ll be fine in a soft landing,” he said.

    Despite gently ribbing his competitor, Michele said he and Rieder were “very friendly” and have known each other for three decades, dating to when Michele was at BlackRock and Rieder was at Lehman Brothers. Rieder recently teased Michele about a JPMorgan dictate that executives had to work from offices five days a week, Michele said.

    Now, the economy’s path could write the latest chapter in their low-key rivalry, leaving one of the bond titans to look like the more astute investor.

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  • Epstein accuser seeks new testimony from JPMorgan CEO Jamie Dimon

    Epstein accuser seeks new testimony from JPMorgan CEO Jamie Dimon

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    Lawyers for a Jeffrey Epstein victim asked a federal judge on Friday to allow them to take new testimony from JPMorgan Chase CEO Jamie Dimon and others as part of a lawsuit against the bank over its dealings with sex predator Epstein.

    The lawyers, who deposed Dimon for the suit last month, alleged in a Manhattan District Court filing that JPMorgan has “strategically” failed to promptly turn over documents to them as part of the case, as required by Judge Jed Rakoff.

    That prevented the accuser’s lawyers from asking questions about those documents at the time Dimon and other key witnesses were deposed, according to the filing by attorney Sigrid McCawley.

    The filing says that after Dimon’s deposition, JPMorgan “produced 1,500 documents, some of which came from the custodial files of witnesses whose depositions had long passed.”

    The accuser, who is suing under the pseudonym Jane Doe, in her suit claims that JPMorgan facilitated and financially benefited from Epstein’s sex trafficking of her and other young women for years when he was a customer of the bank.

    Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., right, at the US Capitol following a meeting with Senate Majority Leader Chuck Schumer in Washington, DC, US, on Wednesday, May 17, 2023.

    Sarah Silbiger | Bloomberg | Getty Images

    The government of the U.S. Virgin Islands alleges the same claim in a separate lawsuit pending in the same courthouse.

    JPMorgan denies any wrongdoing but has said it regrets having had Epstein as a client.

    In addition to Dimon, the accuser’s lawyers want to reopen the depositions of Mary Erdoes, who is CEO of JPMorgan’s asset and wealth management division; Mary Casey, who was Epstein’s banker for about a decade at JPMorgan; and a fourth person, only identified in the filing as JPMorgan’s “representative.”

    All four would be asked about documents turned over only after their initial depositions, the filing said.

    One such document, turned over after Dimon’s deposition was taken May 26, “appears to refer to a 2019 internal review of [redacted] electronic communications with Jeffrey Epstein, conducted after Epstein’s 2019 arrest and death,” according to the filing.

    One late-produced document was a timeline that among other things referenced emails in which a then-top bank executive Jes Staley asks Epstein a question.

    “These documents demonstrate that JPMC was fully capable of learning the full extent of Epstein and Staley’s personal relationship … and yet waited to do so until 2019 despite the myriad red flags and public reports about Epstein’s conduct over the years,” the filing said.

    “Plaintiff would have confronted JPMC’s CEO, Mr. Dimon,
    with this document during his deposition had it been produced in a timely manner,” the filing said.

    McCawley noted that Rakoff in May had admonished JPMorgan for turning over documents to the plaintiff’s legal team “at an inexplicably slow rate.”

    “Despite the Court’s clear warning, JPMC still failed to expeditiously produce documents from the custodial files of key witnesses, some of whom had already been deposed, for strategic reasons,” the lawyer wrote.

    “For example, the weekend prior to the close of fact discovery, and immediately after the May 26 deposition of its CEO Jamie Dimon, JPMC produced 1,500 documents, some of which came from the custodial files of witnesses whose depositions had long passed,” McCawley wrote.

    “This pattern of producing documents from the custodial files of witnesses after their depositions has persisted throughout the discovery period.”

    Joseph Evangelisti, a spokesman for JPMorgan, in an email to CNBC said, “Plaintiffs like the headlines, but no amount of time on the record will change the fact that Jamie never met the man, never worked with the man, and wishes in hindsight the man had never been a client of the firm.”

    — CNBC’s Eamon Javers contributed to this report.

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  • Jamie Dimon, America’s top banker, has ‘no plans’ to run for office

    Jamie Dimon, America’s top banker, has ‘no plans’ to run for office

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    JPMorgan Chase CEO Jamie Dimon talks to reporters as he leaves the U.S. Capitol after an unannounced meeting with U.S. Senate Majority Leader Schumer that was reportedly about the possibility of the U.S. defaulting on its debt, outside the U.S. Capitol in Washington, U.S., May 17, 2023. 

    Evelyn Hockstein | Reuters

    JPMorgan Chase CEO Jamie Dimon has “no plans” to run for office, according to a statement from the bank Monday.

    Speculation about Dimon’s possible future in politics flares up from time to time. The CEO is respected in business circles for his stewardship of JPMorgan, building it into the biggest and most profitable U.S. bank.

    Last week, hedge fund manager Bill Ackman tweeted that Dimon should run for president in the upcoming 2024 elections. That came after Dimon said in a recent interview that he would like to one day serve his country “in one capacity or another.”

    “As he has said in the past, Jamie has no plans to run for office,” the bank said in its statement Monday.  “He is very happy in his current role.”

    Still, Dimon, who took over at JPMorgan in 2005, has himself occasionally fed the speculation. In off-the-cuff remarks in a 2018 investor meeting, Dimon said that he could take on then-President Donald Trump in a race. He quickly said he regretted the comments.

    In recent years, Dimon has pushed his institution in new directions, attempting to tackle some of the country’s intractable issues including health care, economic disparity and urban blight.

    But his long tenure has sparked questions about succession planning at the New York-based bank.

    Last month, at the firm’s annual investor day, an analyst asked Dimon how many more years he expected to serve as CEO. The question came after Morgan Stanley CEO James Gorman announced an orderly succession process expected to unfold within the year.

    Dimon didn’t directly answer the question.

    “I can’t do this forever, I know that,” he said. “But my intensity is the same. I think when I don’t have that kind of intensity, I should leave.”

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  • JPMorgan CEO Jamie Dimon says other bank exec could have booted Jeffrey Epstein as customer

    JPMorgan CEO Jamie Dimon says other bank exec could have booted Jeffrey Epstein as customer

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    JP Morgan CEO Jamie Dimon looks on during the inauguration of the new French headquarters of US’ JP Morgan bank on June 29, 2021 in Paris.

    Michel Euler | AFP | Getty Images

    JPMorgan Chase CEO Jamie Dimon testified last week that a top executive at the bank, Mary Erdoes, who had raised concerns about long-time customer Jeffrey Epstein, had the power to boot him as a client, according to a transcript of his deposition obtained by CNBC on Wednesday.

    Dimon’s testimony Friday came after disclosures that Erdoes as early as 2006 was aware of suspicious transfers of money out of Epstein’s accounts, which lawsuits now allege were used for sex trafficking of young women.

    Dimon also testified that JPMorgan’s then-general counsel Stephen Cutler had “the ultimate authority to kick him out if” issues surrounding Epstein “had gone too far.”

    “He was delegating reputational decisions to somebody els” Dimon said.

    During the deposition, Dimon was shown an email that Cutler sent Erdoes an email about Epstein on July 21, 2011, in which Cutler wrote: “I would like to put it and him behind us. Not a person we should do business with, period.”

    Epstein was terminated as a customer in 2013, two years after that email and five years after he pleaded guilty to a Florida state charge of soliciting sex from a minor.

    Dimon also testified he was not informed that Epstein was indicted in Florida for sex crimes in 2006, or of other concerns about him that others at the bank raised, the deposition reveals.

    “I don’t recall knowing anything about Jeffrey Epstein until the stories broke sometime in 2019” Dimon said, referring to when Epstein was arrested on federal child sex trafficking charges.

    “I was surprised that I didn’t even — had never even heard of the guy, pretty much. And how involved he was with so many people,” Dimon said.

    A lawyer asked Dimon: “As CEO of private [banking] or asset and wealth management, Mary Erdoes could have decided to terminate Jeffrey Epstein as a customer, as a client, of JPMorgan; is that right?”

    Dimon answered, “I generally would say that’s true, yes.”

    JPMorgan is accused in two lawsuits of enabling and benefiting from sex trafficking by Epstein.

    CNBC Politics

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    Dimon was deposed at JPMorgan’s headquarters in New York by lawyers for the plaintiffs, and for former bank executive Jes Staley, who JPMorgan argues is responsible for any civil liability a jury might find.

    “I think what happened to these women is atrocious, and I’m horrified at the amount of human trafficking that takes place,” Dimon said when asked if the accusers of Epstein deserved an apology.

    “And I wouldn’t mind personally apologizing to them, not because we committed the crime, we did not, and not because we believe we’re responsible, but that any potential thing, what little role that we could have eased it or helped catch it quicker or something like that, or get it to law enforcement quicker or get law enforcement to react to it quicker, which they obviously didn’t,  you know, I would apologize to them.”

    “For that, yes,” he said.

    This is breaking news. Check back for updates.

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  • JPMorgan rejects claim that Dimon and Staley discussed Epstein: ‘We believe this is false’

    JPMorgan rejects claim that Dimon and Staley discussed Epstein: ‘We believe this is false’

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    Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, D.C., US, on Thursday, Sept. 22, 2022.

    Al Drago | Bloomberg | Getty Images

    JPMorgan Chase on Wednesday rejected allegations cited in a new report that CEO Jamie Dimon over years discussed the bank’s then-customer Jeffrey Epstein — a sex predator — with Jes Staley, who at the time was a top JPMorgan executive.

    “We believe this is false. There is no evidence that any such communications ever occurred — nothing in the voluminous number of documents reviewed and nothing in the nearly dozen depositions taken, including that of our own CEO,” JPMorgan spokeswoman Patricia Wexler said in a statement to CNBC.

    “The one person who claims this to be true is currently accused of horrific acts and dishonesty – and hasn’t been deposed,” Wexler said, referring to Staley.

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    Wexler’s comments came hours after The Wall Street Journal published an article saying that Staley, in legal documents, said that for years he communicated with Dimon about JPMorgan’s business with Epstein.

    Epstein was a client of the bank from 1998 to 2013, keeping hundreds of millions of dollars on deposit in multiple accounts.

    “In the documents, Staley said that Dimon communicated with him when Epstein was arrested in 2006 and in 2008 when Epstein pleaded guilty” to a sex crime in Florida, The Journal reported.

    “Staley also said that Dimon communicated with him various times about whether to maintain Epstein as a client through 2012,” according to The Journal.

    Epstein served more than a year in jail for the Florida conviction of soliciting sex from a minor, a case that was widely reported at the time.

    The Journal also reported that it had seen documents indicating that Dimon and Staley had a meeting scheduled with Epstein on March 2, 2010. JPMorgan told that newspaper that Dimon did not attend that meeting, and that it was not on the CEO’s calendar.

    Dimon was deposed on Friday for two civil lawsuits in U.S. District Court in Manhattan against the bank accusing JPMorgan of enabling and financially benefitting from sex trafficking by Epstein.

    One suit was filed by the government of the U.S. Virgin Islands, where Epstein maintained a residence on a private island. The other complaint was filed by an Epstein accuser who is seeking to make her complaint a class-action suit on behalf of other women.

    The suit against JPMorgan by an Epstein accuser alleges that Staley “knew without any doubt that Epstein was trafficking and abusing girls.”

    JPMorgan has claimed in a court filing that Staley is the person identified, without being named in that suit, as using “aggressive force” in sexually assaulting an Epstein accuser.

    Staley denies wrongdoing and also denies having known about Epstein’s abuse of young women.

    Deutsche Bank, which became Epstein’s bank in 2013 after JPMorgan severed ties with him on the heels of Staley’s exit from the bank, earlier this month agreed to settle for $75 million a lawsuit by another Epstein accuser. That deal will benefit other women who were victimized by Epstein during the time he was a Deutsche Bank customer.

    JPMorgan, which denies any wrongdoing, has alleged in legal filings that Staley is responsible for any civil liability arising from Epstein’s use of funds he had on deposit at that bank to send young women to the Virgin Islands and elsewhere to be abused by him and others.

    Wexler last week said after Dimon’s deposition, “Our CEO reaffirmed after his deposition that, as he has previously said, he never met with him, never emailed him, does not recall ever discussing his accounts internally, and was not involved in any decisions about his account.”

    “There are over a million pages of emails and other documents that have been produced in this case and not one comes close to even suggesting that he had any role in decisions about Epstein’s accounts,” Wexler said. 

    “As we have said, we now know that Epstein’s behavior was monstrous, and his victims deserve justice. In hindsight, any association with him was a mistake and we regret it, but these suits are misdirected as we did not help him commit his heinous crimes.” 

    Epstein, 66, killed himself in a Manhattan jail in August 2019, a month after federal authorities arrested and charged him with child sex trafficking.

    Dimon has expressed regret that JPMorgan did business with Epstein

    “I am so sad that we had any relationship to that man whatsoever,” the CEO told Bloomberg in an interview May 11.

    “You know, we had top lawyers evaluating, from the [U.S. Securities and Exchange Commission] enforcement, the [Department of Justice], you know, and obviously, had we known then what we know today, we would have done things differently,” Dimon said.

    –CNBC’s Dawn Giel contributed to this report.

    If you are having suicidal thoughts, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.

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  • Dimon calls for Washington-Beijing engagement in first China visit since 2021 controversy

    Dimon calls for Washington-Beijing engagement in first China visit since 2021 controversy

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    JPMorgan Chase and Company President and CEO Jamie Dimon testifies before a Senate Banking, Housing, and Urban Affairs hearing on “Annual Oversight of the Nation’s Largest Banks”, on Capitol Hill in Washington, U.S., September 22, 2022. 

    Evelyn Hockstein | Reuters

    JPMorgan Chase & Co CEO Jamie Dimon on Wednesday called for “real engagement” between policymakers in Washington and Beijing, as Sino-U.S. relations continue to fray.

    Speaking at the JPMorgan Global China Summit in Shanghai — in his first visit to China since his 2021 apology for joking that JPMorgan would outlast the Chinese Communist Party — Dimon said that security and trade disputes between the world’s two largest economies over are “resolvable.”

    “You’re not going to fix these things if you are just sitting across the Pacific yelling at each other, so I’m hoping we have real engagement,” Dimon said, according to Reuters.

    He advocated for a “de-risking” of the economic ties between the East and West rather than for a full-scale decoupling, as the Wall Street giant seeks to boost its presence in China.

    In November 2021, Dimon expressed “regret” over remarks that JPMorgan would outlast China’s ruling party, seeking to limit damage to the bank’s growth ambitions in the country. The comments that invoked Beijing’s ire came shortly after JPMorgan won regulatory approval to become the first foreign company to establish full ownership of a securities brokerage in China.

    Top U.S. and Chinese commerce officials met last week for “candid and substantive discussions” surrounding bilateral trade and commercial relations, in the first cabinet-level exchange between Washington and Beijing in months.

    National security concerns also underpin a souring of relations between the two superpowers. The U.S. on Tuesday accused a Chinese fighter jet of engaging in an “unnecessarily aggressive maneuver” while intercepting a U.S. military reconnaissance aircraft in international airspace over the South China Sea.

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  • Goldman Sachs is cutting jobs again amid Wall Street deals slump

    Goldman Sachs is cutting jobs again amid Wall Street deals slump

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    David Solomon, CEO, Goldman Sachs, speaks during the Milken Institute Global Conference in Beverly Hills, California, April 29, 2019.

    Kyle Grillot | Bloomberg | Getty Images

    Goldman Sachs is preparing for its third round of layoffs since September as Wall Street firms adjust to a slump in deals activity.

    The company is expected to trim fewer than 250 jobs in the coming weeks, a person with knowledge of the New York-based bank’s plans said Tuesday.

    Goldman Sachs, led by CEO David Solomon, was among the first major Wall Street firms to trim jobs in September, cutting a few hundred positions. It then slashed more jobs in January, releasing about 3,200 employees. Morgan Stanley announced about 3,000 job cuts this month, and JPMorgan Chase cut about 500 jobs, CNBC reported last week.

    But Goldman is more tied to the ups and downs of Wall Street than its rivals. Its combined 16% drop in first-quarter trading and advisory revenue contributed to a disappointing start to the year.

    Managing directors and some partners will be affected by the Goldman cuts, according to the person, who declined to be identified speaking about layoffs. The Wall Street Journal reported the news earlier Tuesday.

    Goldman had 45,400 employees as of March 31, a 6% decline from the fourth quarter of 2022.

    Clarification: This story was updated to reflect that JPMorgan Chase had cut about 500 jobs last week.

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  • ‘Goliath is winning’ as largest banks see more business flow, says Wells Fargo’s Mike Mayo

    ‘Goliath is winning’ as largest banks see more business flow, says Wells Fargo’s Mike Mayo

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    Mike Mayo, Wells Fargo Securities senior banking analyst, joins ‘Power Lunch’ to discuss Goldman Sachs as the bank is reported to have another round of layoffs and the upside for investing in banks.

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  • JPMorgan Chase cut about 500 technology and operations jobs this week, sources say

    JPMorgan Chase cut about 500 technology and operations jobs this week, sources say

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    JPMorgan Chase & Co. headquarters in New York, US, on Wednesday, Jan. 18, 2023.

    Gabby Jones | Bloomberg | Getty Images

    JPMorgan Chase cut about 500 positions this week, mostly among technology and operations groups, according to people with knowledge of the move.

    The cuts were spread across the New York-based firm’s main divisions of retail and commercial banking, asset and wealth management and its corporate and investment bank, said the people, who declined to be identified speaking about personnel matters.

    Like many financial firms, JPMorgan periodically trims staff during the year, even as it hires thousands more workers to fill roles. The bank has about 13,000 open positions, said one of the people.

    Under CEO Jamie Dimon, JPMorgan has been in growth mode as of late, most recently by acquiring failed regional bank First Republic in a government-brokered deal. This week, JPMorgan offered positions to about 85% of First Republic’s roughly 7,000 workers.

    JPMorgan had 296,877 employees as of March 31, 8% higher than a year earlier.

    The bank declined to comment about its personnel decisions.

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  • JPMorgan CEO Jamie Dimon testifies he had no involvement with Jeffrey Epstein account, bank says

    JPMorgan CEO Jamie Dimon testifies he had no involvement with Jeffrey Epstein account, bank says

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    JPMorgan Chase CEO Jamie Dimon talks to reporters as he leaves the U.S. Capitol after an unannounced meeting with U.S. Senate Majority Leader Schumer that was reportedly about the possibility of the U.S. defaulting on its debt, outside the U.S. Capitol in Washington, May 17, 2023.

    Evelyn Hockstein | Reuters

    JPMorgan Chase CEO Jamie Dimon testified at a deposition in New York on Friday that he had no involvement in the accounts of longtime customer Jeffrey Epstein, the bank said.

    Dimon was being deposed for lawsuits accusing JPMorgan of facilitating and profiting from Epstein’s sex trafficking of young women, which he financed with money he had on deposit there.

    “At today’s deposition, our CEO repeatedly confirmed that he never met with him, never emailed him, does not recall ever discussing his accounts internally, and was not involved in any decisions about his account,” said a bank spokeswoman. ”There are millions and millions of emails and other documents that have been produced in this case and not one comes close to even suggesting that he had any role in decisions about Epstein’s accounts.”

    The spokeswoman added: ”As we have said, we now know that Epstein’s behavior was monstrous, and his victims deserve justice. In hindsight, any association with him was a mistake and we regret it, but these suits are misdirected as we did not help him commit his heinous crimes.”

    Dimon gave his deposition at JPMorgan’s headquarters in Manhattan. The bank earlier lost an effort to dismiss the suits by the plaintiffs – the government of the U.S. Virgin Islands and an anonymous Epstein accuser.

    The suits claim that JPMorgan, the biggest bank in the United States, kept Epstein as a customer even after learning he was being investigated for sexually abusing underage girls in Florida and after he pleaded guilty in a state charge there in 2008 to paying for sex from a minor.

    The bank is accused in the complaints in U.S. District Court in Manhattan of doing so in order to keep Epstein, who kept tens of millions of dollars in accounts there, despite internal concerns about his slimy reputation.

    The Virgin Islands says Epstein used frequent cash withdrawals he made from those accounts to pay for young women to travel to the American territory so that he and others could abuse them at his residence on a private island he owned.

    “Human trafficking was the [principal] business of the accounts Epstein maintained at JPMorgan,” the Virgin Islands’ suit says.

    Dimon’s deposition is being taken in private. The questions he is asked and the answers he gives would only become public if they are used in court filings and proceedings, or if they are leaked.

    JPMorgan didn’t immediately respond to CNBC’s request for comment.

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    In addition to questioning Dimon under oath, the Virgin Islands has issued a flurry of subpoenas seeking documents related to Epstein and JPMorgan from a number of high-profile people the government suspects Epstein tried to recruit as fellow clients of the bank.

    They include Tesla CEO Elon Musk, Google co-founders Larry Page and Sergey Brin, former Disney executive Michael Ovitz, Hyatt Hotels executive chairman Thomas Pritzker and Mort Zuckerman, the billionaire real estate investor.

    Dimon’s deposition comes more than a week after Deutsche Bank agreed to pay $75 million to Epstein victims to settle a would-be class action lawsuit by one of his accusers. Deutsche Bank had taken on Epstein as a customer after JPMorgan severed ties with him in 2013, after keeping him as a client for 15 years.

    JPMorgan has said Dimon had not reviewed Epstein’s accounts when he was a client there from 1998 through 2013, the year that JPMorgan severed its relationship with him.

    Epstein died six years later from suicide in a New York jail a month after federal authorities charged him with trafficking girls for sex.

    JPMorgan pushes back

    JPMorgan, in a related complaint, has said that any civil liability it would have from Epstein’s conduct is the responsibility of its former executive Jes Staley, who was a friend of Epstein and his main business contact at the bank.

    Staley, who also denies any wrongdoing, earlier this week lost a bid to dismiss JPMorgan’s complaint against him, which among other things seeks to recoup $80 million in compensation from him.

    In addition to trying to shift blame to Staley, JPMorgan this week in a court filing accused the Virgin Islands of being “complicit in the crimes of Jeffrey Epstein.”

    The filing said the Virgin Islands looked the other way as Epstein trafficked young women because he was giving high-ranking officials there money, advice and favors.

    The filing specifically says that Epstein paid tuition for the children of John de Jongh and his wife, Cecile, when John served as Virgin Islands governor and when Cecile worked for Epstein managing his companies in the territory.

    Cecile also allegedly made efforts to secure student visas for young women connected to Epstein, and was his “primary conduit for spreading money and influence throughout the USVI government.”

    The Washington Post on Friday published details of a deposition earlier taken of Mary Erdoes, who runs JPMorgan’s asset and wealth management division.

    “Oh boy,” Erdoes wrote in a 2011 email to another bank executive after she found out Epstein’s status as a sex offender as a result of his Florid conviction had been affirmed, The Washington Post reported.

    The newspaper said that was “at least the sixth time Erdoes … had been alerted to Epstein’s criminal or civil legal trouble for sex crimes.”

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  • JPMorgan is developing a ChatGPT-like A.I. service that gives investment advice

    JPMorgan is developing a ChatGPT-like A.I. service that gives investment advice

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    Jamie Dimon, chief executive officer of JPMorgan Chase, is planning his first visit to mainland China in four years as the American bank prepares to host three conferences in Shanghai at the end of May.

    Giulia Marchi | Bloomberg | Getty Images

    JPMorgan Chase is developing a ChatGPT-like software service that leans on a disruptive form of artificial intelligence to select investments for customers, CNBC has learned.

    The company applied to trademark a product called IndexGPT this month, according to a filing from the New York-based bank.

    IndexGPT will tap “cloud computing software using artificial intelligence” for “analyzing and selecting securities tailored to customer needs,” according to the filing.

    The viral success of OpenAI’s ChatGPT technology last year has forced entire industries to grapple with the arrival of artificial intelligence. ChatGPT, which uses massive language models to create human-sounding responses to questions, has ignited an arms race among tech giants and chipmakers over what is seen as the next foundational innovation.

    The technology has a range of possible uses in finance. Banks including Goldman Sachs and Morgan Stanley have already begun testing it for internal use. That includes ways to help Goldman engineers create code or answer Morgan Stanley financial advisors‘ queries.

    First mover?

    But JPMorgan may be the first financial incumbent aiming to release a GPT-like product directly to its customers, according to Washington D.C.-based trademark attorney Josh Gerben.

    “This is a real indication they might have a potential product to launch in the near future,” Gerben said.

    “Companies like JPMorgan don’t just file trademarks for the fun of it,” he said. The filing includes “a sworn statement from a corporate officer essentially saying, ‘Yes, we plan on using this trademark.'”

    JPMorgan must launch IndexGPT within about three years of approval to secure the trademark, according to the lawyer. Trademarks typically take nearly a year to be approved, thanks to backlogs at the U.S. Patent and Trademark Office, he said.

    The applications are typically vaguely written to give companies the broadest possible protections, Gerben said.

    But JPMorgan’s filing does specify that IndexGPT uses the same flavor of A.I. popularized by ChatGPT; the bank plans to use A.I. powered by “Generative Pre-trained Transformer (GPT) models.”

    “It’s an A.I. program to select financial securities,” Gerben said. “This sounds to me like they’re trying to put my financial advisor out of business.”

    JPMorgan declined to comment for this article.

    Middlemen fears

    Financial advisors have long feared the arrival of technology good enough to displace their role in markets. Those fears have largely yet to materialize.

    Wealth management firms, including Morgan Stanley and Bank of America’s Merrill, offer simple roboadvisor services, but that hasn’t stopped their human advisors from gathering billions of dollars more in assets.

    Earlier this week, executives at JPMorgan touted their progress in applying A.I. across operations at the company’s annual investor conference.

    The bank, which employs 1,500 data scientists and machine-learning engineers, is testing “a number of use cases” for GPT technology, said global tech chief Lori Beer.

    “We couldn’t discuss A.I. without mentioning GPT and large language models,” Beer said. “We’ve recognized the power and opportunity of these tools and are committed to exploring all the ways they can deliver value for the firm.”

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  • JPMorgan Chase says Jeffrey Epstein paid tuition for kids of U.S. Virgin Islands governor

    JPMorgan Chase says Jeffrey Epstein paid tuition for kids of U.S. Virgin Islands governor

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    Sex offender Jeffrey Epstein paid school tuition for the children of then-governor of the U.S. Virgin Islands, whose wife made efforts to secure student visas and a work license for young women connected to Epstein, according to an updated court filing Thursday by JPMorgan Chase.

    Those tuition payments, whose duration and amounts were not revealed, allowed then-Gov. John de Jongh Jr. “to funnel additional money to his political campaigns,” JPMorgan said in the filing in U.S. District Court in Manhattan.

    Epstein also “offered to fund Governor de Jongh’s defense in the Governor’s criminal case,” where the then-governor was charged in 2015 in connection with the use of public funds to make security improvements at his private residence, according to the filing. Those charges were dropped in early 2016 by the Virgin Islands Department of Justice.

    JPMorgan alleges Epstein’s generosity was part of his broader effort to build sway on the islands.

    The filing is part of the bank’s defense of a civil lawsuit by the U.S. Virgin Islands alleging JPMorgan facilitated Epstein’s sex trafficking of young women. Epstein, who was a JPMorgan customer between 1998 and 2013, owned two private islands in the territory and abused multiple young women at his residence on one of those islands.

    JPMorgan denies wrongdoing in the case.

    JPMorgan CEO Jamie Dimon is due to be deposed Friday for the Virgin Islands’ lawsuit, as well as for a similar one filed against the bank by an accuser of Epstein.

    “Lest there be doubt that Epstein’s goal was to gain influence, First Lady [Cecile] de Jongh explicitly advised Epstein on how to buy control of the USVI political class,” the filing says.

    The document also refers to one time when Cecile de Jongh was “asking Epstein what visas the ‘ladies’ have and trying to arrange English as a Second Language classes for them.”

    Former Gov. de Jongh served as Virgin Islands governor between 2007 and 2015.

    Cecile de Jongh worked for Epstein, managing his companies in the territory. She made $200,000 in 2007 alone, the filing notes.

    CNBC has reached out to the de Jonghs for comment through an asset management firm in the Virgin Islands where the former governor is a director.

    The filing was first docketed Tuesday with extensive redactions, but it was refiled Thursday, with some details about former Gov. de Jongh and Cecile now visible. Also visible are allegations related to current Virgin Islands Gov. Albert Bryan Jr. and his immediate predecessor in that office, Kenneth Mapp.

    Bryan, who is due to be deposed June 6 in the case, suggested schools to which Epstein should donate $50,000, the filing said. Bryan also asked $30,000 go to the Virgin Islands Little League, according to the document.

    Portions of the filing that were visible Tuesday said the government of the Virgin Islands was “complicit in the crimes of Jeffrey Epstein.”

    JPMorgan said Epstein — who died in 2019 by a jailhouse suicide while awaiting trial on federal sex trafficking charges — gave top officials in the territory money, advice and favors as they looked the other way when he trafficked young women there.

    A spokesperson for the Office of the Attorney General of the Virgin Islands, in an emailed statement responding to the updated filing, said, “JPMorgan Chase facilitated Jeffrey Epstein’s abuse, and should be held accountable for violating the law.”

    “This is an obvious attempt to shift blame away from JPMorgan Chase, which had a legal responsibility to report the evidence in its possession of Epstein’s human trafficking, and failed to do so,” the spokesperson said.

    The document calls Cecile de Jongh, who managed Epstein’s companies there when she was first lady, “a ready partner” in helping Epstein transport young women to exploit in the Virgin Islands, where he maintained a home.

    The bank alleged Cecile de Jongh was “Epstein’s primary conduit for spreading money and influence throughout the USVI government.” The filing said she emailed him in 2011 proposed language for a bill in the Virgin Islands legislature that would update sex offender monitoring laws.

    “This is the suggested language; will it work for you?” she asked in that email, according to the filing.

    The document also said Epstein, who was a registered sex offender due to his conviction in Florida state court in 2008 for soliciting sex from a minor, replied, “We should add out of country for more than 7 days, otherwise I could not go for a day trip to Tortola, at the last minute.”

    JPMorgan alleged Epstein, despite receiving “lucrative tax incentives” and “lax enforcement” of his sex offender status from the Virgin Islands, “still could not freely transport and exploit young women without assistance from USVI government officials.”

    The filing said Cecile de Jongh “arranged for Epstein to meet with a local immigration lawyer to assist at least one” young woman who needed a visa to visit the American territory.

    Cecile de Jongh also “contacted the University of the Virgin Islands … to find out whether three young women could enroll there to obtain student visas,” according to the filing.

    “Perhaps cognizant of the risk in having a registered sex offender sign the letter, First Lady de Jongh wrote to Epstein that he should think about whether ‘[he] should sign [the letter] or one of us,'” the document said.

    “Ultimately UVI structured a bespoke class to enroll victims and provide cover for their presence in the territory — the same year Epstein donated $20,000 to the university through one of his companies,” the filing said.

    “In addition to visas, some of the young women Epstein brought to the island also needed
    employment,” the filing noted.

    The document said when one of those women needed a dental license, “First Lady de Jongh reached out to the Director for the Office of Professional Licensure and Health Planning at the USVI Department of Health regarding a ‘new practice act’ that would have ‘significant changes and allowances for reciprocity.'”

    “The Director wrote to Ms. de Jongh that once the act went before the Senate Committee she would have a ‘clearer idea on what [the young woman’s] options are moving forward,'” it said.

    The filing alleged Cecile de Jongh also reached out to contacts in the attorney general’s office and solicitor general’s office about the new rules.

    “Ultimately, First Lady de Jongh was successful,” the filing said. “The young woman eventually set
    up a local dental practice in the USVI and shared an office with Epstein’s companies.”

    In detailing claims Cecile advised Epstein on how to use his money to control politicians in the Virgin Islands, the filing says Epstein, at her suggestion, “explored paying monthly retainers to USVI politicians to ensure their ‘loyalty and access.'”

    “First Lady de Jongh suggested that Epstein ‘consider putting Celestino [White] on some sort of monthly retainer. That is what will get you his loyalty and access,'” said the document.

    White was a Virgin Islands senator.

    The filing also details how Epstein met often with the leadership of the Virgin Islands Port Authority, which leased hangar space to him at its airport, where women were brought in for Epstein.

    Cecile de Jongh at one point asked Epstein, on behalf of her husband, the governor, “if he would support” the bid by then-Sen. Carlton Dowe to return to the Port Authority, the filing said.

    Dowe, according to the message from Cecile, would be a “good person for us” there, the filing said.

    “Based on his government connections, when traveling through the USVI’s airport accompanied by young women as a registered sex offender, Epstein could count on his ‘great relationship’ with the officials there to avoid scrutiny or detection,” the filing said.

    “In sum, in exchange for Epstein’s cash and gifts, USVI made life easy for him,” JPMorgan’s filing said.

    The document added, “The government mitigated any burdens from his sex offender status. And it made sure that no one asked too many questions about his transport and keeping of young girls on his island.”

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