Jamie Dimon Dumped $150 Million of His JPMorgan Stock in February; Now He Says His Regulators Want 25 Percent More Capital at his Bank

[Gunnar Larson]

https://wallstreetonparade.com/2024/04/jamie-dimon-dumped-150-million-of-his-jpmorgan-stock-in-february-now-he-says-his-regulators-want-25-percent-more-capital-at-his-bank/


By Pam Martens and Russ Martens: April 15, 2024 ~

Jamie Dimon, Chairman and CEO of JPMorgan Chase
Jamie Dimon, Chairman and CEO of JPMorgan Chase

On October 27 of last year, JPMorgan Chase filed an 8K form with the
Securities and Exchange Commission (SEC) advising that, for the first time
ever, its long-tenured Chairman and CEO, Jamie Dimon, and his family,
intended to “sell 1 million shares” of his common stock holdings in the
bank in 2024.

The news made headlines because an insider selling a large amount of stock
in any company – and particularly a bank with JPMorgan Chase’s serial
history of running afoul of the law – can be a harbinger of bad news ahead
for other shareholders.

Dimon didn’t wait long into 2024 to start dumping stock. JPMorgan Chase
filed another SEC form this past February showing that Dimon had sold
821,778 shares of the bank’s common stock for $150,167,222.52, or an
average share price of $182.73 – which was suspiciously close to the
stock’s all-time high at that point.

Dimon has acquired the bulk of his shares in the same fashion as his former
mentor, Sandy Weill, acquired his shares in Citigroup – through stock
grants from his hear no evil, see no evil Board of Directors. (Dimon had,
in his earlier years, been Weill’s first lieutenant at Citigroup.)

Weill stepped down as CEO of Citigroup in 2003. Just one day after stepping
down as CEO, Citigroup’s obliging Board of Directors allowed Weill to sell
back to the corporation 5.6 million shares of his Citigroup stock for $264
million. This eliminated Weill’s risk that his big share sale would drive
down his own share prices as he was selling. The Board negotiated the price
at $47.14 for Weill’s shares. Six years later, in the spring of 2009,
Citigroup was a 99-cent stock and receiving the largest taxpayer and
Federal Reserve bailout in U.S. history.

Between December 2007 and July 2010, Citigroup received the following
bailouts to keep it afloat: The U.S. Treasury injected $45 billion of
capital into Citigroup; there was a government guarantee of over $300
billion on certain of its assets; the FDIC provided a guarantee of $5.75
billion on its senior unsecured debt and $26 billion on its commercial
paper and interbank deposits; and secret revolving loans from the Federal
Reserve sluiced a cumulative $2.5 trillion in below-market-rate loans to
Citigroup according to an audit released by the Government Accountability
Office in 2011.

On May 9, 2011, Citigroup did a 1 for 10 reverse stock split to dress up
the disaster of its share price history. For each 100 shares the
shareholder held previously, he or she now owned just 10 shares. Citigroup
investors who have held onto their shares since Weill’s stock sale in 2003
are down 87 percent at yesterday’s closing price of $59.68 – which is
actually $5.97 adjusted for the reverse stock split.

In spin that is similar to Weill’s tactics, Jamie Dimon has, for more than
a decade, attempted to brainwash Congress, the media, and the public at
large by referring to his bank as the “Fortress Balance sheet.” His latest
letter to shareholders uses the phrase five times – at one point phrasing
it as an “unquestionable fortress balance sheet.”

And yet, in the same letter to shareholders, Dimon concedes that his bank’s
federal regulators don’t have the same level of confidence in this
so-called “Fortress.” Dimon writes that if the capital rules proposed by
the FDIC, Office of the Comptroller of the Currency and the Federal Reserve
are implemented, they “would increase our firm’s required capital by 25%.”

Another reasonable way to read that is that federal banking regulators,
whose bank examiners have intensely examined the books of the bank, believe
that JPMorgan Chase is undercapitalized by 25 percent and thus poses a
potential systemic risk to the U.S. financial system until it bulks up its
capital.

This capital battle is officially known as the proposed Basel III rules and
Dimon is leading the charge to stop federal bank regulators from
implementing the rules. Internal government documents show that Dimon and
his Chief of Staff, Judith Miller, met separately with the following Fed
Governors on December 15 to argue against the proposed rules: Fed Governor
Adriana Kugler; Fed Vice Chair Philip Jefferson; and Fed Governor
Christopher Waller.

According to Fed Chair Jerome Powell’s daily calendar, he met personally
with Jamie Dimon on January 26, 2024 from 4:45 p.m. to 5:15 p.m.

Financial Times reporters Joshua Franklin and James Politi report that in
mid March, Dimon met in a one-on-one meeting with Vice President Kamala
Harris and separately with President Biden’s Chief of Staff, Jeff Zients.

At a Senate Banking Committee hearing on March 7, Senator Elizabeth Warren
said that the 37 largest banks that would be impacted by the higher capital
rules have “spent tens of millions of dollars running ads during Sunday
night football and millions more for an army of lobbyists to try to twist
arms here in Congress.”

The TV ads have been grossly misleading, making it sound as if the higher
capital requirements at just 37 banks would hurt working families and
farmers – ignoring that inadequate capital levels collapsed giant Wall
Street banks in 2008 and put millions of innocent Americans out of work and
in foreclosure as the U.S. economy collapsed along with the toxic debt
bombs exploding at the banks.

Fed Chair Powell was the sole witness at the March 7 Senate Banking
hearing. Warren told Powell this:

“Despite all you said last year when the banks failed about supporting Vice
Chair Barr’s recommendations to strengthen rules for big banks, public
reporting now says that you are driving efforts inside the Fed to weaken
the capital rule. You even told the House Financial Services Committee
representatives yesterday that you think it’s ‘very plausible’ that you
withdraw the rule.”

Warren concluded with this zinger to Powell:

“You are the leader of the Fed and when the heat was on last year, you
talked a lot about getting tougher on the banks. But now the giant banks
are unhappy about that and you’ve gone weak-kneed on this. The American
people need a leader at the Fed who has the courage to stand up to these
banks and protect our financial system.”

For more key background on the Basel III capital proposal, see our reports
below:

The Fed Has a Dirty Little Secret: It’s Been Allowing the Wall Street Mega
Banks to Calculate their Own Capital Requirements

Jamie Dimon Hires Dodd-Frank Hatchet Man to Weigh Suing the Fed Over
Proposed Capital Rules

Wall Street CEOs Want the Line Between a Federally-Insured Bank and a Wall
Street Trading Casino Erased; Regulators Want Higher Capital to Prevent That
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