Did JP Morgan Facilitate Illegal Financial Activities?

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JP Morgan Chase
Pedestrians walk past an JP Morgan Chase Bank, N.A. branch in Manhattan on Thursday, October 17, 2013.
JP Morgan Chase
Pedestrians walk past an JP Morgan Chase Bank, N.A. branch in Manhattan on Thursday, October 17, 2013.

Federal agents arrested the brain behind Ponzi scheme, Bernie Madoff, in 2008. The arrest hailed JPMorgan Chase & Co. (NYSE:JPM)’s long-standing efforts in preventing public disclosure of material information related to the massive crime. Madoff is accused of executing a $64.8 billion Ponzi scheme that caused net losses of more than $17 billion. JP Morgan is also accused of involvement in this criminal financial activity.

Madoff, though not responsible for the 2008 great crisis, his arrest in middle of that collapse was certainly a symbol of Wall Street’s greed and criminality. He couldn’t have executed the illegal activities to this scale without his close relationship with country’s largest bank – JP Morgan Chase.

JPMorgan’s Alleged Involvement

A court appointed trustee filed a complaint alleging JPMorgan Chase & Co. (NYSE:JPM) for overlooking the Madoff’s fraud and portrayed bank at the very center of the fraud. A complaint was filed to recover funds for thousands of innocent investors.

Madoff’s decades long fraudulent scheme helped JP Morgan made hundreds of millions of dollars as the bank was servicing Madoff’s accounts. In addition, the bank also executed timely withdrawals from Madoff’s scheme to save its $276 million worth of investment. The complaint has documented all these things.

Was JPMorgan Really Aware?

It is believed that JPMorgan Chase & Co. (NYSE:JPM) overlooked the massive fraud for about 15 years when Madoff used his bank accounts to run the fraudulent scheme. It is also alleged that the bank and its senior officials knew about the Ponzi scheme since long.

John Hogan, Chief Risk Officer of Investment Bank at JP Morgan Chase and Matt Zames, head of several business lines, suspected Madoff of running a Ponzi scheme as early as June 2007. The scam ruined the lives of thousands of investors and Madoff has been sentenced to 150 years and there is no such punishment for JP Morgan Chase.

Technical Analysis

JP Morgan Chart
JP Morgan Stock Chart

JPMorgan Chase & Co. (NYSE:JPM) has been in strong uptrend ever since the stock bottomed out near $54 in mid October’14. Moving ahead the stock has strong support at $61.91, $60.76, $59.95, $58.78 on the lower end. Overall trend in the stock looks up and it can continue to rally in near-term.

Actionable Insight

Buy JPMorgan Chase & Co. (NYSE:JPM) above $62.5 for target of $63, $63.6 with stop-loss of $62.25

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