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Re: jb92106 post# 710846
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Something for naysayers to chew on as we wait for news…
JP Morgan Chase Claims in WaMu Counter Suit, Proof of Fraud or Perjury
Written by Frank Lordi
Tuesday, 24 March 2009 22:47
On Tuesday March 24, 2009 JP Morgan Chase filed a counter suit against Washington Mutual Inc, WaMu's former holding company as well as the FDIC in an attempt to protect its "purchase" of Washington Mutual Bank and it's assets from the FDIC.
On page 9 of the court filing JP Morgan Chase asserts the following, "JP Morgan Chase only had two days after being briefed by the FDIC to submit a bid and then only twenty-four hours from the time the bid was accepted by the FDIC until the time the acquisition closed to complete the single largest acquisition of a failed institution in United States history. The circumstances which led to the execution of the P&A (purchase and agreement) meant that JP Morgan Chase had limited opportunity to prepare for this unprecedented transaction."
The mainstream press has refused to report the truth about the seizure of Washington Mutual, including details of the FDIC brokering a secret deal with JP Morgan Chase, well in advance of the $300 billion bank's seizure and sale to JP Morgan Chase for $1.9 billion.
In a strange turn of events it now appears as if JP Morgan Chase either committed perjury by lying in the counter suit filing or committed fraud during conference calls with its investors, on September 25, 2008 as well as on February 9, 2009.
According to the FDIC, the mainstream press, and JP Morgan's countersuit, the deal was done almost overnight. JP Morgan specifies they "only had two days" time between being briefed by the FDIC and making their bid to the FDIC. As you will now hear from JP Morgan's own conference calls, this cannot be true unless they were lying to their investors in the September and February conference calls.
9/25/08 Conference Call
Listen to Audio
Question: You sounded as if you really had had a lot of time to look at the loan tapes and everything else as you said. How long did you really have to get into the data rooms and do the due diligence here?
JPM Answer: I don't want to go into the details specifically but we had a lot of time. We had a lot of detail. And a lot of very direct conversations. I mean we had probably 75 people at JP Morgan Chase involved in the process, both going through data as well as talking to member of the company. And we used our full resources including our mortgage folks in the investment bank to run the loan tapes and get views on values. It was not a rushed analysis.
Question: So it was more weeks than days? Is that fair?
JPM Answer: It was... I'll just tell you it was probably one of the most thorough things that we've ever done.
9/25/08 Conference Call
Listen to Audio
JPM Statement: We spent an awful lot of time going through an awful lot of detail coming up with what our estimates are. These are not estimates that came together in a 12 or 24 hour time period. They're estimates that came together over a substantial period."
2/09/09 Conference Call
Listen to Audio
JPM Statement: I'm going to go on and talk about Washington Mutual for a sec. We did a lot of work over a long period of time at really analyzing the company.
JP Morgan filed the counter suit as a direct reaction to Washington Mutual Inc having filed a lawsuit against the FDIC Friday March 20th, accusing the FDIC of failing to meet it's obligations as receiver, in that they did act in accordance to the Federal Deposit Act's mandate that the Receiver (FDIC) is required to "maximize the net present value return from the sale or disposition of such assets."
Comparisons to the sale of IndyMac were also mentioned in the complaint. The failed bank had 33 branches, 18 billion dollars in deposits, and $20.7 billion in assets. It was sold by the FDIC for $13.9 billion.
Washington Mutual on the other hand had 2200 branches, $160 billion of deposits, and assets worth over $300 billion in assets. The FDIC sold all of this to JP Morgan Chase for $1.9 billion.
JP Morgan Chase's counter suit claims the banking giant purchased WaMu in "good faith" and seeks to blame the FDIC for any wrong doing. In doing so, JP Morgan may have committed perjury by misstating the period of time in which they had to assess the purchase as two days. However, if they only had two days time to figure things out, then they have likely revealed that they are guilty of fraud by lying to their investors, having repeatedly raved about the in depth and "thorough" analysis they did over a "substantial period" of time.
JP Morgan also claims that they purchased more than $4 billion in cash, which they believe was included in the $1.9 billion dollar purchase.
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