Whose bad news is Cyprus burying?

JPMorgan, SAC Capital, HSBC breathe a sigh of relief.

As CNBC's John Carney points out, it's a great time to bury bad news.  While everyone looks at Cyprus, JPMorgan Chase's story has been dropped by most publications - which is a good thing for them, as their panel hearing on Friday did not go well...

So here it is in brief, via extracts from the New York Times report, during which CEO Douglas Braunstein is berated "for nearly an hour":

For nearly an hour, the executive, Douglas L. Braunstein, was berated for playing down JPMorgan’s risky bets to investors and regulators on a conference call in April, just weeks before the bank disclosed the costly blowup.

“You give this very glowing call,” said Senator Carl Levin, Democrat of Michigan, “instead of telling them what you knew” — that the portfolio “had been losing money and violating risk limits.”

Mr. Braunstein defended his statements in the conference call, saying they were the most “accurate” depiction based on the information at the time.

“You thought that was a balanced presentation?” Mr. Levin asked incredulously, peering over his glasses.

..and during which Ina Drew, the former head of JPMorgan’s chief investment office (which was at the centre of the scandal), also comes under some aggressive over-the-glasses peering:

While Ms. Drew acknowledged that “things went terribly wrong,” she directed virtually all of the blame at lower-level traders in London and other subordinates. She returned to this defense throughout the hearing, deflecting culpability by faulting inaccurate information.

..eventually all this the blame-shifting starts prompting sarky comments from John McCain, the chief Republican on the panel:

“The traders seemed to have more responsibility and authority than the higher-up executives,” he said.

..and even Michael Cavanagh, co-head of the corporate and investment bank, which was more removed from the scandal, is questioned closely and sarcastically:

But Mr. Levin persisted, asking, “How do you possibly justify your process?” Was it a “coincidence,” he asked, that the models shifted just as losses on the trades were ballooning? At one point, he reminded Mr. Cavanagh that he was under oath.

The other pieces of submerged bad news are a money laundering fine for HSBC, and a record insider trading fine for SAC Capital - of $6000m, announced on Friday. This is huge (c.f. the second largest SEC insider trading sanction was $156 m, paid by Galleon Group founder Raj Rajaratnam back in May 2011).

"These settlements call for the imposition of historic penalties," SEC's George Canellos said during a press conference call on Friday.


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Jeremy Corbyn challenged by Labour MPs to sack Ken Livingstone from defence review

Former mayor of London criticised at PLP meeting over comments on 7 July bombings. 

After Jeremy Corbyn's decision to give Labour MPs a free vote over air strikes in Syria, tonight's Parliamentary Labour Party (PLP) meeting was less fractious than it could have been. But one grandee was still moved to declare that the "ferocity" of the attacks on the leader made it the most "uplifting" he had attended.

Margaret Beckett, the former foreign secretary, told the meeting: "We cannot unite the party if the leader's office is determined to divide us." Several MPs said afterwards that many of those who shared Corbyn's opposition to air strikes believed he had mishandled the process by appealing to MPs over the heads of the shadow cabinet and then to members. David Winnick declared that those who favoured military action faced a "shakedown" and deselection by Momentum activists. "It is completely unacceptable. They are a party within a party," he said of the Corbyn-aligned group. The "huge applause" for Hilary Benn, who favours intervention, far outweighed that for the leader, I'm told. 

There was also loud agreement when Jack Dromey condemned Ken Livingstone for blaming Tony Blair's invasion of Iraq for the 7 July 2005 bombings. Along with Angela Smith MP, Dromey demanded that Livingstone be sacked as the co-chair of Labour's defence review. Significantly, Benn said aftewards that he agreed with every word Dromey had said. Corbyn's office has previously said that it is up to the NEC, not the leader, whether the former London mayor holds the position. In reference to 7 July, an aide repeated Corbyn's statement that he preferred to "remember the brilliant words Ken used after 7/7". 

As on previous occasions, MPs complained that the leader failed to answer the questions that were put to him. A shadow minister told me that he "dodged" one on whether he believed the UK should end air strikes against Isis in Iraq. In reference to Syria, a Corbyn aide said afterwards that "There was significant support for the leader. There was a wide debate, with people speaking on both sides of the arguments." After David Cameron's decision to call a vote on air strikes for Wednesday, leaving only a day for debate, the number of Labour MPs backing intervention is likely to fall. One shadow minister told me that as few as 40-50 may back the government, though most expect the total to be closer to the original figure of 99. 

At the end of another remarkable day in Labour's history, a Corbyn aide concluded: "It was always going to be a bumpy ride when you have a leader who was elected by a large number outside parliament but whose support in the PLP is quite limited. There are a small number who find it hard to come to terms with that result."

George Eaton is political editor of the New Statesman.