To:
Sent: Thursday, March 15, 2012 11:24:46 AM
Subject: Goldman Sachs and JP Morgan whistle blowers!
Hmmm... look what the cat dragged in....
Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly.
With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables.
They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities.
Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.
....
It is rather surprising that what should be well known liabilities on our balance sheet have not erupted into wider scale scrutinization. I call all honest and courageous JPMorgan employees to step up and fight the cronyism and wide-scale manipulation by reporting the truth. We are only helping reality come to light therefore allowing a real valuation of our banking industry which will give investors a chance to properly adjust without being totally wiped out. I will be contacting a lawyer shortly about this matter, as I believe no other whistleblower at JPMorgan has come forward yet. Our deepest secrets lie within the hands of honest employees and can be revealed through honest regulators that are willing to take a look inside one of America's best kept secrets. Please do not allow this to turn into another Enron.
All in the open folks, submitted to the CFTC and therefore certainly "fair game", although it is also only fair to note that it is impossible from the information given to document and prove up whether the person doing the submitting is an actual JP Morgan employee.
In fact, it might be a hoax.
But the only way to know will for regulators to look and exposition of the facts to occur. Anyone care to bet on either of those things happening?
Perhaps the Goldman resignation letter via OpEd page will get some legs and lead to real benefit.
Perhaps.
I can only ask "what took you so long?"
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
From who's perspective? Goldman's? Obviously not.
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way.
Oh really? Look, let's get right down to it -- Goldman isn't the only firm that does this. In fact, we have over 100,000 admitted acts of screwing not just with people but with court process in the "robosigning" mess. That's not "taking advantage", it's perjury, and it's not an allegation it was admitted to by the act of withdrawing the affidavits.
Goldman, of course, doesn't foreclose as they don't service loans. They did, however, allegedly screw people blind with the same sort of crap when it came to Abacus (and other fancy instruments) and paid a boatload of money to settle allegations that were very similar in form and substance. The Abacus CDOs and similar, related issues revolved around telling people things that were not true (specifically related to the quality of component securities in the instrument, who picked them and why the instrument was created in the first place) which is the essence of robosigning -- the simple act of making things up when the facts don't fit with your goal of "making a profit."
The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
Such a sad song. The problem is the disingenuous nature of this "confession."
It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
It's not illegal to intentionally mislead people about what you're selling them and how it was constructed? That's what the allegation was with Abacus, you know. It's also at the core of the entire ALT-A and "Subprime" lending bubble.
"Fog-a-mirror" loans are not illegal. What's illegal is bundling them into securities and representing that they have certain credit qualities when you either know they don't or have every reason to know but intentionally avert your eyes.
The textbook definition of fraud is the act of intentionally misrepresenting a material fact to someone with the intent of inducing them to enter into a transaction they would otherwise not entertain, when that material fact (or facts) are then a proximate cause of loss.
Well?
These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.
What model are we talking about? Remember, the model for banking in the United States has been for more than 20 years that when you rob someone and get caught the penalty is that you have to give some of the ill-gotten profits back. Nobody goes to jail and there is no punitive sanction -- ever.
It seems that the model is working exactly as intended. Of course the problem with this model is that eventually the public may wake up to it and either (1) demand that Congress put a stop to this and that the DOJ enforce the damn law or (2) decide that neither Congress or the DOJ will do so and thus either (a) eschew doing business with said institutions or (b) take justice into their own hands and start decorating lampposts.
I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.
No change will come from the board so long as the people of this nation stand for this sort of blatant robbery. The fact of the matter is that a half-million citizens are paying 400% higher sewer bills in Jefferson County Alabama due to another big bank getting the county involved in hinky derivative deals that had no probative value for the county and in fact were entered into in part as a consequence of bribes.
This isn't speculation or assertion it is fact as documented by the convictions (and guilty pleas) of some of the people involved. Yet not only did the institutions involved not find themselves being prosecuted under criminal law they also didn't have to give all the money back they made and unwind the deals at their own expense so that (1) there would be a punitive sanction imposed on everyone involved sufficient to deter it from happening again and (2) far more importantly, the victims would be compensated and not be forced to eat the loss that occurred as a result of the now-proved "beyond a reasonable doubt" criminal behavior.
Oh incidentally, when it comes to Jefferson County Goldman appears to be involved in that deal in a round-about sort of way. It appears, if Matt Taibbi's reporting is correct, that Goldman was paid off by JP Morgan to stay out of the transaction.
That report, if true, is blatant anti-competitive behavior and thus illegal under long-existent law.
And this is just one example, albeit one that has and is continuing to hose a half-million people for the benefit of a handful of bigwig executives and traders.
Until lawless behavior is prosecuted as zealously when a big bank does it as when someone walks into the corner branch and says "stick 'em up!" nothing will change. Until the people of this country rise and demand that prosecution be zealously pursued starting with those who have stolen the most from the largest number of people there will be no reason for corporate boards to take note of and demand adherence to the law by the employees of these firms, say much less anything that can be reasonably called ethical behavior.
It will be a sad day in America when the people of this nation finally snap and take matters into their own hands. Nobody in their right mind wants to see that outcome as the rule of law cuts both ways and everyone, even vampire squid, are entitled to due process.
But if the lawlessness of the last decade and more is not reversed that day's dawn in America and elsewhere is also inevitable.
Replies
CFTC Pulls Public Comments from JP Morgan Whistle-blower: “We Are Fearful of a Cascading Credit Event; Wide-Scale Market Collapse”
One argument you’ll hear from the majority of Americans who refuse to wake up to the madness around them is that if there truly was an economic and financial cabal in cahoots with the government we would have heard about it. If this was actually happening, wouldn’t there be insiders from the private and public sectors that would have alerted us to the conspiracies? And wouldn’t the mainstream media report on it? And wouldn’t the Justice Department vigorously pursue and prosecute those responsible for the fraud, theft and manipulation?
It turns out that there are whistle-blowers – hundreds of them. But any attack on the establishment is met with either a full-on counter-attack that targets the credibility of the individual bringing forth the information and marginalizes the content of the message by dismissing it as the ravings of a lunatic or disgruntled employee, or, it’s simply erased from public view by the very institutions tasked with investigating such activity.
Yesterday, an open letter posted in the public comments section at the Commodity Futures Trading Commission (CFTC) by a self described JP Morgan insider and whistle-blower was removed in short order (no cache of the page exists, but it was briefly indexed by search engines). It was dead on arrival. A direct link to the letter now leads to an empty page in the hopes that it will never be seen by the 99% of Americans who tune in only to mainstream news sources for their daily dose of truth. Don’t worry, though, because if there’s one thing alternative news media learned from Orwell’s 1984 and real world experience, it’s that we should always expect the powers that be will attempt to rewrite history. As such, the full content of the post has been copied and archived for posterity’s sake by alternative media (and reprinted below).
In the letter, the JP Morgan insider reveals that high level executives and traders at the bank are putting the investments and savings of thousands, if not millions, of hard working Americans at risk of complete, wide-scale market collapse through their machinations and fraudulent practices. Moreover, he suggests that executives at his bank are fully aware of commodity manipulations in which the bank engages, as well as the risks posed by a European collapse, an event that, according to the whistle-blower, will lead to annihilation of investments within a matter of days.
Here is the full open letter (now removed from CFTC’s public comments), made available via Market Ticker and Modern Survival Blog:
[Emphasis Added]
From: Z A N
Organization(s):
JPMorgan Chase
Comment No: 57019
Date: 3/14/2012
Dear CFTC Staff,
Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly. With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables. They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities. Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.
I wish to remain anonymous as of now as fear of termination mounts from what I am about to reveal. Robert Gottlieb is not my real name; however he is a trader that is involved in a lawsuit for manipulative trading while working with JPMorgan Chase. He was acquired during our Bear Stearns acquisition and is known to be the notorious person shorting in the silver future market from his trading space, along with Blythe Masters, his IB Global boss. However, with that said, we are manipulating the silver futures market and playing a smaller (but still massively manipulative) role in manipulating the gold futures market. We have a little over a 25% (give or take a percentage) position in the short market for silver futures and by your definition this denotes a larger position than for speculative purposes or for hedging and is beyond the line of manipulation.
On a side note, I do not work directly with accounts that would have been directly impacted by the MF Global fiasco but I have heard through other colleagues that we have involvement in the hiding of client assets from MF Global. This is another fraudulent effort on our part and constitutes theft. I urge you to forward that part of the investigation on to the respective authorities.
There is something else that you may find strange. During month-end December, we were all told by our managers that this was going to be a dismal year in terms of earnings and that we should not expect any bonuses or pay raises. Then come mid-late January it is made known that everyone received a pay raise and/or bonus, which is interesting b/c just a few weeks ago we were told that this was not likely and expected to be paid nothing in addition to base salary. January is right around the time we started increasing our short positions quite significantly again and this most recent crash in gold and silver during Bernanke’s speech on February 29th is of notable importance, as we along with 4 other major institutions, orchestrated the violent $100 drop in Gold and subsequent drops in silver.
As regulators of the free people of this country, I ask you to uphold the most important job in the world right now. That job is judge and overseer of all that is justice in the most sensitive of commodity markets. There are many middle-income people that invest in the physical assets of silver, gold, as well as mining stocks that are being financially impacted in a negative way b/c of our unscrupulous shorts in the precious metals commodity sector. If you read the COT with intent you will find that commercials (even though we have no business being in the commercial sector, which should be reserved for companies that truly produce the metal) are net short by a long shot in not only silver, but gold.
It is rather surprising that what should be well known liabilities on our balance sheet have not erupted into wider scale scrutinization. I call all honest and courageous JPMorgan employees to step up and fight the cronyism and wide-scale manipulation by reporting the truth. We are only helping reality come to light therefore allowing a real valuation of our banking industry which will give investors a chance to properly adjust without being totally wiped out. I will be contacting a lawyer shortly about this matter, as I believe no other whistleblower at JPMorgan has come forward yet. Our deepest secrets lie within the hands of honest employees and can be revealed through honest regulators that are willing to take a look inside one of America’s best kept secrets. Please do not allow this to turn into another Enron.
Kind Regards,
-The 1st Whistleblower of Many
We wouldn’t bet on any of this actually being investigated by regulatory agencies, because according to President Obama and other politicians, nobody has committed any crimes.
What we would bet on is that this anonymous whistle blower isn’t just blowing smoke. Given the recent revelations of other insiders like Greg Smith, a former Goldman Sachs executive director of their equities derivatives business, who warned this week of a toxic and destructive environment at the government’s leading bailout darling, we’re of the belief that JP Morgan is no different.
The entire system is rigged, and they have most certainly done a great job of keeping it afloat and maintaining the illusion of stability in the eyes of the masses. One day, perhaps soon, the people will lose confidence in these firms and the government institutions that are complicit in their manipulations. When that happens, look out, because we’ve got decades of paper receipts and derivatives valued in the tens of trillions of dollars that will be shown to be worth absolutely nothing.
When this ponzi scheme finally comes down it will be unlike anything we’ve ever seen in terms of economic collapse and financial asset annihilation.