Settlements: JPMorgan to ‘admit wrongdoing’
JPMorgan Chase will pay $800 million to regulators “and make a groundbreaking admission of wrongdoing,” said Ben Protess and Jessica Silver-Greenberg in NYTimes.com. The bank will be conceding a degree of responsibility for its multibillion-dollar “London whale” loss last year, in which a London-based trader blew $6 billion through risky trades. The admission of wrongdoing, in particular, reverses regulators’ “longtime policy that has allowed banks to ‘neither admit nor deny’ misconduct” and “will be a rare stain” on JPMorgan’s reputation. The unusual acknowledgment could also expose the largest U.S. bank to civil suits down the road.
The settlement amounts to “a high-profile win for the Securities and Exchange Commission,” said Andrew Ackerman, Scott Patterson,and Robin Sidel in The Wall Street Journal. Its new chairwoman, Mary Jo White, “has been pushing for settlements that include such admissions.” The deal would settle the concerns of the SEC, the Comptroller of the Currency, the Federal Reserve, and the U.K. Financial Conduct Authority. But JPMorgan still faces other probes, including “a potential enforcement action from the Commodity Futures Trading Commission for allegedly placing misleading values on its derivatives positions behind the London trades.”
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Economy: CBO says U.S. debt is ‘unsustainable’
The Congressional Budget Office is not optimistic, said Lisa Mascaro in the Los Angeles Times. In a new report this week, the CBO said the annual federal deficit has shrunk to its lowest level since 2008—thanks to an improving economy, higher taxes, and reduced spending. “But even with declining deficits, the nation’s debt keeps piling up.” In its report, the CBO called current policies “unsustainable,” and said public debt is expected to consume 100 percent of the nation’s gross domestic product by 2038.
Retail: Trader Joe’s drops part-time health care
Part-time workers at Trader Joe’s can kiss their health care goodbye, said Dave Jamieson in HuffingtonPost.com. In a memo to employees, the grocer’s CEO “told workers who log fewer than 30 hours a week that they will need to find insurance on the Obamacare exchanges next year.” The company, which “has won kudos for offering its health care, dental, and vision plans to part-time workers at a reasonable price,” said it will pay part-timers $500 to help them switch to plans under the Affordable Care Act. “Many of you should be able to obtain health-care coverage at very little if any net cost to you,” the memo said.
Cars: Chrysler plans to file IPO
Chrysler is going public, said Brent Snavely in the Detroit Free Press. The automaker is expected this month to file documents with regulators “outlining an initial public stock offering.” The filing “would resolve a protracted legal fight” between majority shareholder Fiat and the UAW Retiree Medical Benefits Trust, which needs to sell shares to fund retirees’ health-care coverage. The two parties have been locked in a battle over the company’s value. “An IPO eventually would let investors determine what Chrysler shares are worth.”
Stocks: Microsoft plans $40 billion buyback
Microsoft wants its shares back, said Romain Dillet in TechCrunch.com. The computing giant announced a massive buyback this week of up to $40 billion worth of stock. The announcement follows news of CEO Steve Ballmer’s departure and Microsoft’s $7 billion acquisition of Nokia’s mobile handset business. Buyback programs are often seen as “a great vote of confidence for a company’s stock,” but they also “reduce the number of shares available on the stock market and therefore artificially boost the value of the remaining shares.”
