JPMorgan Chase & Co. said the U.S. Justice Department is conducting at least eight separate investigations into the bank's activities, ranging from recruitment in Asia to its relationship with Ponzi scheme operator Bernard Madoff, American Banker reported.
The largest U.S. bank disclosed for the first time in a filing Friday that the Justice Department is examining its energy-trading practices, which were subject to a $410 million civil settlement with the Federal Energy Regulatory Commission in July. Investigations are also focusing on mortgage-bond sales, interest-rate rigging, the credit-derivatives market, and the bank's trading loss last year, according to the filing.
U.S. Attorney General Eric Holder has said that it's a priority for his department and for President Barack Obama to hold banks accountable. JPMorgan CEO Jamie Dimon visited Holder in September to try to negotiate a settlement of mortgage-related cases against the bank.
"The scope and breadth of risky practices at JPMorgan are mind-boggling," said Mark Williams, a former Federal Reserve bank examiner who teaches risk management at Boston University. "Some of these probes are criminal, they're not even just civil anymore, and I think it's very telling about the broad risk-taking culture that was allowed under Jamie Dimon."
The eight Justice Department investigations disclosed in JPMorgan's filing compare with one in Citigroup Inc.'s. Citigroup has disclosed two other investigations that weren't included in the latest filing because there was no material change.