Let's say you're an international businessman who has unaccountably come into a rather large amount of cash. Being a totally above-board kind of guy, you don't want to see your windfall laundered through some shady fly-by-night operation of dubious legality. You want it laundered through a elite institution of dubious legality. Then, in a stroke of pure coincidence, you come across this story:
Swiss financial markets authority FINMA has found that the Swiss subsidiary of U.S. investment bank JPMorgan broke anti-money laundering rules, a Swiss court document showed. FINMA ruled on June 30 that JPMorgan Switzerland had “seriously infringed” regulatory oversight provisions, according to a ruling issued by the Federal Administrative Court on Nov. 8 and published on Thursday. The case involved a “violation of obligations of diligence on questions of money-laundering,” the court document said.
There are a few ways that you, the flush international businessman, might interpret this news. On one hand it really must take some effort to get busted for money laundering lapses by, uh, the Swiss. Points against for sloppiness. But by the same token, wow, there's actually some hope you might be able to entrust your dubious assets with what might be the most established financial institution on the planet, the largest lender by assets in the Western world, JPMorgan Chase & Co. Lucky you!
Whether you want to view the Swiss contretemps as a minor embarrassment for JPMorgan or a clever bit of wealth management viral marketing, there's plenty this news doesn't tell us. The case in question has remained sealed in Swiss courts, with only a broad finding of wrongdoing having become public so far. We have no indication of the nature or severity of the alleged offense, which could be as minor as failure to file some AML reports or as major as, well, wherever your imagination leads you.
But unfortunately, JPMorgan's recent money-laundering history doesn't exactly set the bank up for the most charitable assumptions here. We reported a few weeks ago on a case pending in the Southern District in which a group of mostly Chinese investors accuse JPM of helping an accused scammer wire their investments to at least 27 known money laundering locations, including Mauritius, Kuwait and the Isle of Man. We don't need to dwell on Madoff.
Then again, JPMorgan is unfathomably huge, and with hugeness come the inevitable slips and blunders. One little violation in Switzerland and a few aggrieved Chinese investors in New York do not an international money laundering operation make. But neither does it look very good!