JP Morgan Investigated In Yet Another Criminal Probe

JP Morgan Investigated In Yet Another Criminal Probe

It wouldn’t be a week in the financial markets without more revelations of criminal conduct at a global mega-bank. Yesterday it was revealed that JPMorgan Chase has been placed under formal investigation in France as part of a probe into alleged tax evasion by senior managers at investment firm Wendel, a court official said on Wednesday.

The probe indicates that JP Morgan knew about the tax scheme and helped the company carry out the criminal activity. The bank is suspected of acting as an accessory to tax evasion, the court official said.

A Paris-based spokesman for JPMorgan declined to comment on the move, part of a wider investigation in which as many as 14 Wendel executives face charges including tax evasion and insider trading over transactions conducted in 2004-2007.

JPMorgan filed a notice with the SEC on Tuesday saying that in April it had been “notified that the authorities were formally investigating its role” in transactions financed by the bank on behalf of a number of Wendel managers.

France has vowed to crack down on tax avoidance by individuals, offshore companies and the financial institutions that serve them, following publication of leaked HSBC client data that had been handed to the Paris authorities in 2008.

French magistrates last month ordered HSBC to post bail of 1 billion euros ($1.13 billion) to cover potential fines if convicted on charges that it helped French clients dodge tax.

JPMorgan is also defending separate civil claims by some of the same Wendel managers, according to the quarterly filing made on Tuesday, which gave no further details.

“JPMorgan Chase is responding to and cooperating with the investigation,” it said.

The probe, once again, illustrates a long pattern of criminal conduct by the company. Yet the company and its large peers, such as Goldman Sachs, HSBC and Citi, remain beyond reproach from regulators. The fines they often rack up are paid by shareholders and senior executives remain out of prison despite orchestrated complex criminal schemes that victimize working class Americans.