Wall Street Seeks Justice (From Wall Street)By
Justice of some kind is being served in the continuing spate of settlements and suits regarding JPMorgan Chase, but it might not be exactly the type that Occupy Wall Street was dreaming of. Just when the bank thought that it was getting close to resolving most of its problems, a new group has emerged asking for more money from the embattled bank.
Investors in failed mortgage-backed securities purchased before the 2008 financial crisis are looking for an additional $5.75 billion from JPMorgan. The group includes BlackRock and Neuberger Berman, an asset manager for wealthy people. Neuberger was owned by Lehman Brothers from 2003 to 2008, the period of time when most toxic mortgage securities changed hands. Lehman filed for bankruptcy in 2008 due to its own heavy load of worthless mortgage debt, and Neuberger was spun off.
Neuberger is now mainly employee owned. So basically, a bunch of Wall Street types, formerly part of what the makers of Despicable Me characterized as the Bank of Evil, are suing to get money from another bank staffed by Wall Street types. Of course, JPMorgan is actually owned by shareholders, many of whom are probably the pension funds and retirees an Occupy Wall Streeter might be looking out for. Payments made by JPMorgan ultimately come out of the price of the shares, not the pockets of the bankers who made the decisions, most of whom remain in their jobs.
The group now looking to sue JPMorgan previously won $8.5 billion from Bank of America in a similar case. In that instance, 22 investors started out asking for $12 billion to compensate for losses tied to mortgage securities at Countrywide Financial, which Bank of America took over at the peak of the financial crisis. Bank of America is also publicly owned.
There is another group that stands to profit: the lawyers, who will makes millions, if not billions, on both sides of every transaction. Main Street, once again, can only look on in wonder.