L.A. councilman targets JPMorgan Chase, calls for accountability
A Los Angeles city councilman called Wednesday for his colleagues to explore ways of punishing banking giant JPMorgan Chase & Co. for engaging in financial misconduct, possibly by terminating the company’s contracts with the city.
Councilman Gil Cedillo, with support from Council President Herb Wesson and Councilman Curren Price, introduced a motion that seeks to determine how much business the city’s pension funds and other agencies have been doing with JPMorgan Chase. The proposal calls for the council‘s lawyers and financial analysts to provide legal options for severing the city’s ties with the company.
Cedillo would not agree to an interview with The Times. His aides released a statement from the councilman, saying that JPMorgan Chase “targeted underserved communities and someone must hold them accountable.”
“By taking a stand in LA, we are sending a signal to other municipal and state government entities around the country,” he said in the statement. “If we want to make sure that banks like JP Morgan do not engage in such improper conduct in the future — they need to realize there is potential to lose business here in the City of LA. “
The Libor manipulation scandal has, as WSJ reports, ensnared at least 17 financial institutions and 22 individuals in a wide-ranging investigation spanning 11 countries and four continents. So far, it has netted at least $5 billion in penalties, with more on the way. The Wall Street Journal has taken the most complete list of allegedly involved parties and mapped an extensive web of 298 reported connections that reveals the depth of the alleged conspiracy from the ‘alleged’ ringleader Tom Hayes and involving practically ever major bank in the world.
Full Interactive “Spider-Web” here.
And the first mover advantage… Barclays
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Citi sells Fannie Mae mortgage servicing rights … to Fannie Mae
Fannie Mae has purchased mortgage servicing rights on about 64,000 of its own loans from Citigroup (C), as the nation’s 3rd largest lender looks to shed future liabilities tied to its servicing practices.
The unusual transaction was announced late Wednesday, with the bank saying it had reached a definitive agreement with the GSE to sell servicing rights tied to approximately $10.3 billion of unpaid principal balances on mortgages owned by the GSE.
“The sale includes the majority of the delinquent loans serviced by CitiMortgage for Fannie Mae, and it represents nearly 20% of the total loans serviced by CitiMortgage that are 60 days or more past due,” the bank said in a statement. Nearly all of the loans transfered are delinquent.