PFGBest Update: What is JPMorgan Hiding?

Throughout the PFGBest bankruptcy and liquidation process, there’s been a deafening silence coming from one big player: JPMorgan. While US Bank was supposed to have held the $220mm that has turned out to be missing, PFG was supposed to have had $400mm in client assets… and the rest of that money was supposedly held at JPMorgan – where any and all clients actually wired their money when opening accounts with PFG.

Naturally, one would expect inquiries into the status of this money, and that’s exactly what the PFG trustee Ira Bodenstein has done. Cue JPMorgan’s response (via Reuters):

JPMorgan Chase & Co on Monday sought to limit the power the bankruptcy trustee for Peregrine Financial Group has to subpoena information from financial institutions that did business with the failed brokerage.

JPMorgan said in a court filing that Trustee Ira Bodenstein’s request for authorization from a bankruptcy court to serve subpoenas on financial information may be overly burdensome by encompassing Peregrine’s affiliates and wholly owned subsidiaries, in addition to the brokerage itself.

JPMorgan reserved the right to “modify or quash” subpoenas that are too burdensome or broad.

Now we know much of this is just normal lawyers being lawyers type stuff – with the high priced lawyers of JP Morgan likely to object to any motion in which it is involved just because that’s what lawyers do for their clients (the normal course of action is to object, fight, and negotiate until the final language is less onerous than the original language).  And part of it is the ugly desire to get paid you won’t see in the cheery Chase commercials on tv.  Half of the objection is arguing that they should still be able to earn their fees on the accounts of the bankrupt firm (you know, the argument… I’m sorry people lost money, but before those individual investors and farmers and such get what is rightfully theirs – we’re still going to need to earn our fees to support our tax-payer supported billion dollar behemoth).

But still… maybe it’s just us, but something here smells fishy. Is there something JPMorgan wants to keep a secret?

One comment

  1. What blows my mind is that JP Morgan will not even state the amount of the funds being held for the clients of PFG. If they are that secretive and self serving, can we trust their final figure communicated to the trustee? I mean, who will have the right to verify that the figure is correct, and Morgan did not in fact steal 20 million from the clients?

    Morgan has already demonstrated they do not give a damn for the very account holders they were suppose to protect given the nature of segregated accounts. With all their brain power, no one at Morgan
    thought it strange that money once wired to their accounts were subsequently transferred away?

    And they continued to permit PFG to state on their website that Morgan was the bank where their funds were held in a safe and segregated state.

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Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

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