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FTR #772 Body Count II: (Collateralized “Death” Obligations)

Posted by Dave Emory ⋅ February 9, 2014Post a comment Email This Post Email This Post Print This Post Print This Post
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Since this broad­cast was made, there have been a num­ber of oth­er sus­pi­cious deaths in the finan­cial indus­try, set forth in this post.

Intro­duc­tion: One of the sur­re­al, almost hal­lu­ci­na­to­ry finan­cial instru­ments that were at the cen­ter of the 2008 finan­cial col­lapse were CDO’s–collateralized debt oblig­a­tions. As a num­ber of legal inves­ti­ga­tions into mis­chief appar­ent­ly com­mit­ted by major finan­cial insti­tu­tions on a num­ber of fronts have gained momen­tum, there has been a rash of sui­cides linked to the busi­ness­es under inves­ti­ga­tion. Both JP Mor­gan Chase and Deutsche Bank have been the focal point of more than one of these inves­ti­ga­tions. Both have expe­ri­enced the “sui­cides” of cur­rent or for­mer exec­u­tives with­in a very short peri­od of time.

These sui­cides are occur­ring at a time in which the EU is attempt­ing to shore up Euro­pean banks after the finan­cial melt­down. (Be sure to exam­ine the com­ments on the linked post above, as they con­tain crit­i­cal sup­ple­men­tal infor­ma­tion.) The mor­tal­i­ty rate among Lon­don based bank­ing exec­u­tives has been par­tic­u­lar­ly high in recent years. We won­der if the high mor­tal­i­ty rate, the ongo­ing cap­i­tal trou­bles and legal inves­ti­ga­tions plagu­ing the firms may be relat­ed to these deaths. Are we look­ing at col­lat­er­al­ized “death” oblig­a­tions?

Pro­gram High­lights Include:

  • The death of for­mer Deutsche Bank exec­u­tive William Broeksmit, who was found hanged in Lon­don.
  • The alleged sui­cide of Gabriel Magee, who sup­pos­ed­ly jumped from the roof of the JP Mor­gan build­ing in Lon­don.
  • The alleged sui­cide of Rus­sell Invest­ments exec­u­tive Mike Duek­er, who sup­pos­ed­ly killed him­self at a time when the com­pa­ny was under inves­ti­ga­tion.
  • The dis­ap­pear­ance of a Wall Street Jour­nal reporter who was look­ing into finan­cial irreg­u­lar­i­ties in the com­modi­ties mar­ket. The same sto­ry notes the sus­pi­cious cir­cum­stances of the deaths of Magee and Duek­er.
  • The sup­posed suicide–by nail gun–of an Amer­i­can Title exec­u­tive at a time when the com­pa­ny was under inves­ti­ga­tion.
  • For­mer Deutsche Bank chair­man Josef Ack­er­man­n’s res­ig­na­tion from the Zurich Insur­ance Group fol­low­ing the “sui­cide” of a key aide in August of 2013.
  • As Argenti­na has attempt­ed to sta­bi­lize the for­eign exchange hold­ings of its banks, a very sus­pi­cious and lethal fire occurred at a sup­pos­ed­ly fire-proof stor­age facil­i­ty.
  • Anoth­er bit­coin exchange has halt­ed trad­ing, plung­ing the dig­i­tal cur­ren­cy in val­ue. Just wait until the bit­coin­ers start killing each oth­er to steal each oth­ers’ bit­coins. This sup­posed panacea to the world’s finan­cial ills is already exhibit­ing all of the estab­lished finan­cial world’s ills, and some that the main­stream fis­cal com­mu­ni­ty has thus far avoid­ed. The bit­coin­ers may need their own dig­i­tal cur­ren­cy to kill each oth­er, per­haps named “hit­coin.”

1. A for­mer Deutsche Bank man­ag­er was found dead, an appar­ent sui­cide.

“Ex-Deutsche Bank Man­ager Found Dead in Appar­ent Sui­cide” by Belin­da Gold­smith and Thomas Atkins; Reuters; 1/28/2014.

William Broeksmit, a for­mer senior man­ager at Deutsche Bank with close ties to co-Chief Exec­u­tive Anshu Jain, has been found dead at his home in Lon­don in what appears to have been a sui­cide. Jain and the bank’s oth­er co-CEO Juer­gen Fitschen announced Broeksmit’s death in an inter­nal mail to Deutsche Bank employ­ees. When asked about the death, London’s Met­ro­pol­i­tan Police issued a state­ment say­ing a 58-year-old man had been found hang­ing at a house in South Kens­ing­ton on Sun­day after­noon and been pro­nounced dead at the scene. Police declared the death non-sus­pi­cious. Broeksmit, a U.S. nation­al, was an instru­men­tal founder of Deutsche’s invest­ment bank and one many bankers, includ­ing Jain, who joined Germany’s flag­ship lender from Mer­rill Lynch in the 1990s, when Deutsche launched plans to com­pete on Wall Street. Broeksmit was also a prin­ci­pal actor in Deutsche’s efforts to unwind its riski­er posi­tions and to reduce the size of its bal­ance sheet in the wake of the glob­al finan­cial cri­sis. His death comes at an uncom­fort­able junc­ture for Jain and Fitschen, whose reign has been dogged by poor results and legal trou­bles since they took over from Josef Ack­er­mann in 2012. ... The two CEOs are expect­ed to defend their reform record at the bank’s annu­al news con­fer­ence on Wednes­day. Last week, they revealed that lit­i­ga­tion and restruc­tur­ing costs had pushed Deutsche to a sur­prise loss in the fourth quar­ter of 2013.

CLOSEST ALLY

Broeksmit, who worked as head of risk and cap­i­tal opti­mi­sa­tion, was viewed as one of Jain’s clos­est allies and a key play­er in the bank’s attempts to recov­er fol­low­ing the finan­cial cri­sis. Jain sought to have Broeksmit join the man­age­ment board as head of risk man­age­ment in 2012. But in a major set­back for both men, Ger­man reg­u­la­tor Bafin blocked the appoint­ment, say­ing Broeksmit lacked expe­ri­ence lead­ing large teams. Bafin was not imme­di­ately avail­able for com­ment. The Bun­des­bank, which also over­sees Deutsche, declined to com­ment. Broeksmit worked along­side Jain at Mer­rill Lynch before join­ing Deutsche in 1996 as part of group of rough­ly 100 bankers who, along­side Edson Mitchell, formed the core of Deutsche’s new invest­ment bank­ing busi­ness. Mitchell, one the bank’s most pow­er­ful exec­u­tives, died in a plane crash in 2000.

2. A JP Mor­gan exec alleged­ly com­mit­ted sui­cide at rough­ly the same time.

“UPDATE 3‑JP Mor­gan IT Exec­u­tive Plunges to Death at Bank’s Lon­don HQ” by Costas Pitas and Lau­ra Noo­nan; Reuters; 1/28/2014.

A JP Mor­gan tech exec­u­tive fell to his death from the U.S. bank’s 33-storey tow­er in Lon­don’s Canary Wharf finan­cial dis­trict on Tues­day in what British police said was a “non-sus­pi­cious” inci­dent. Police were called to the glass sky­scraper at 8:02 GMT, where a 39-year-old man was pro­nounced dead at the scene after hit­ting a low­er 9th-floor roof. Wit­ness­es said the body remained on the roof for sev­er­al hours. Lon­don police said no arrests had been made and the inci­dent was being treat­ed as non-sus­pi­cious at this ear­ly stage. A source famil­iar with the mat­ter con­firmed the deceased was Gabriel Magee, a vice pres­i­dent with the JP Mor­gan’s cor­po­rate and invest­ment bank tech­nol­o­gy arm, who had been an employ­ee since 2004. . . . . . . . Though the details of Tues­day’s inci­dent are still unclear, occa­sion­al sui­cides by peo­ple work­ing in Lon­don’s big banks have pro­voked crit­i­cism of the demands placed on some finan­cial ser­vices work­ers. A Bank of Amer­i­ca exchange man­ag­er jumped in front of a train and anoth­er man jumped from a sev­enth-floor restau­rant, both in 2012. A Ger­man-born intern at Bank of Amer­i­ca died of epilep­sy last year in Lon­don. . . .

3. The chief econ­o­mist at Rus­sell Invest­ments was found dead, yet anoth­er alleged sui­cide.

“Rus­sell Invest­ments Chief Econ­o­mist Duek­er Found Dead” by Zachary Trac­er, Noah Buha­yar and Jeff Kearns; Bloomberg; 1/31/2014.

Mike Duek­er, the chief econ­o­mist at Rus­sell Invest­ments, was found dead at the side of a high­way that leads to the Taco­ma Nar­rows Bridge in Wash­ing­ton state, accord­ing to the Pierce Coun­ty Sheriff’s Depart­ment. He was 50. He may have jumped over a 4‑foot (1.2‑meter) fence before falling down a 40– to 50-foot embank­ment, Pierce Coun­ty Detec­tive Ed Troy­er said yes­ter­day. He said the death appeared to be a sui­cide.

Duek­er was report­ed miss­ing on Jan. 29, and a group of friends had been search­ing for him along with law enforce­ment. Troy­er said the econ­o­mist was hav­ing prob­lems at work, with­out elab­o­rat­ing. Duek­er was in good stand­ing at Rus­sell, said Jen­nifer Tice, a com­pany spokes­woman. She declined to com­ment on Troyer’s state­ment about Dueker’s work issues. “We were deeply sad­dened to learn today of the death,” Tice said in an e‑mail yes­ter­day. “He made valu­able con­tri­bu­tions that helped our clients and many of his fel­low asso­ciates.” Duek­er worked at Seat­tle-based Rus­sell for five years, and devel­oped a busi­ness-cycle index that fore­cast eco­nomic per­for­mance.

 He was pre­vi­ously an assis­tant vice pres­i­dent and research econ­o­mist at the Fed­eral Reserve Bank of St. Louis. He pub­lished dozens of research papers over the past two decades, many on mon­e­tary pol­icy, accord­ing to the St. Louis Fed’s web­site, which ranks him among the top 5 per­cent of econ­o­mists by num­ber of works pub­lished. His most-cit­ed work was a 1997 paper titled “Strength­en­ing the case for the yield curve as a pre­dic­tor of U.S. reces­sions,” pub­lished by the reserve bank while he was a researcher there.

Pol­icy Meet­ings

Duek­er worked at the reserve bank from 1991 to 2008, start­ing as an entry lev­el research econ­o­mist, then advanc­ing to senior econ­o­mist, research offi­cer, and assis­tant vice pres­i­dent, accord­ing to Lau­ra Gir­resch, a spokes­woman. He helped the bank’s pres­i­dent pre­pare for Fed­eral Open Mar­ket Com­mit­tee pol­icy meet­ings and wrote and edit­ed for eco­nomic pub­li­ca­tions, she said. Duek­er served as edi­tor of the reserve bank’s research pub­li­ca­tion, Mon­e­tary Trends, and also was an asso­ciate edi­tor of the Jour­nal of Busi­ness and Eco­nomic Sta­tis­tics, Gir­resch said. “He was a val­ued col­league of mine dur­ing my entire tenure at the St. Louis Fed,” said William Poole, who was pres­i­dent of the reserve bank from 1998 to 2008. “Every­one respect­ed his pro­fes­sional skills and good sense.” . . . .

4. A Wall Street Jour­nal reporter dis­ap­peared at around the same time. This sto­ry notes that the deaths and dis­ap­pear­ances are sus­pi­cious.

“A Rash of Deaths and a Miss­ing Reporter – With Ties to Wall Street Inves­ti­ga­tions” by Pam Martens; Wall Street Jour­nal; 2/3/2014.

In a span of four days last week, two cur­rent exec­u­tives and one recent­ly retired top rank­ing exec­u­tive of major finan­cial firms were found dead. Both media and police have been quick to label the deaths as like­ly sui­cides. Miss­ing from the reports is the salient fact that all three of the finan­cial firms the exec­u­tives worked for are under inves­ti­ga­tion for poten­tially seri­ous finan­cial fraud.

The deaths began on Sun­day, Jan­u­ary 26. Lon­don police report­ed that William Broeksmit, a top exec­u­tive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kens­ing­ton sec­tion of Lon­don. The day after Broeksmit was pro­nounced dead, Eric Ben-Artzi, a for­mer risk ana­lyst turned whistle­blower at Deutsche Bank, was sched­uled to speak at Auburn Uni­ver­sity in Alaba­ma on his alle­ga­tions that Deutsche had hid $12 bil­lion in loss­es dur­ing the finan­cial cri­sis with the knowl­edge of senior exec­u­tives. Two oth­er whistle­blow­ers have brought sim­i­lar charges against Deutsche Bank.

Deutsche Bank is also under inves­ti­ga­tion by glob­al reg­u­la­tors for poten­tially rig­ging the for­eign exchange mar­kets – an action sim­i­lar to the charges it set­tled in 2013 over its traders’ involve­ment in the rig­ging of the inter­est rate bench­mark, Libor.

Just two days after Broeksmit’s death, on Tues­day, Jan­u­ary 28, a 39-year old Amer­i­can, Gabriel Magee, a Vice Pres­i­dent at JPMor­gan in Lon­don, plunged to his death from the roof of the 33-sto­ry Euro­pean head­quar­ters of JPMor­gan in Canary Wharf. Accord­ing to Magee’s LinkedIn pro­file, he was involved in “Tech­ni­cal archi­tec­ture over­sight for plan­ning, devel­op­ment, and oper­a­tion of sys­tems for fixed income secu­ri­ties and inter­est rate deriv­a­tives.”

Magee’s par­ents, Bill and Nell Magee, are not buy­ing the offi­cial sto­ry accord­ing to press reports and are plan­ning to trav­el from the Unit­ed States to Lon­don to get at the truth. One of their key issues, which should also trou­ble the police, is how an employ­ee obtains access to the rooftop of one of the most­ly high­ly secure build­ings in Lon­don. Nell Magee was quot­ed in the Lon­don Evening Stan­dard say­ing her son was “a hap­py per­son who was hap­py with his life.” His friends are equal­ly mys­ti­fied, stat­ing he was in a hap­py, long-term rela­tion­ship with a girl­friend.

JPMor­gan is under the same glob­al inves­ti­ga­tion for poten­tial involve­ment in rig­ging for­eign exchange rates as is Deutsche Bank. The firm is also said to be under an inves­ti­ga­tion by the U.S. Senate’s Per­ma­nent Sub­com­mit­tee on Inves­ti­ga­tions for its involve­ment in poten­tial mis­con­duct in phys­i­cal com­modi­ties mar­kets in the U.S. and Lon­don.

One day after Magee’s death, on Wednes­day, Jan­u­ary 29, 2014, 50-year old Michael (Mike) Duek­er, the Chief Econ­o­mist at Rus­sell Invest­ments, is said to have died from a 50-foot fall from a high­way ramp down an embank­ment in Wash­ing­ton state. Again, sui­cide is being pre­sented by media as the like­ly cause. (Do peo­ple hold­ing Ph.D.s real­ly attempt sui­cide by jump­ing 50 feet?) ... Accord­ing to a report in The New York Times in Novem­ber of last year, Rus­sell Invest­ments was one of a num­ber of firms that received sub­poe­nas from New York State reg­u­la­tors who are prob­ing the poten­tial for pay-to-play schemes involv­ing pen­sion funds based in New York. No alle­ga­tions of wrong­do­ing have been made against Rus­sell Invest­ments in the mat­ter.

The case of David Bird, the oil mar­kets reporter who had worked at the Wall Street Jour­nal for 20 years and van­ished with­out a trace on the after­noon of Jan­u­ary 11, has this in com­mon with the oth­er three tragedies: his work involves a com­modi­ties mar­ket – oil – which is under inves­ti­ga­tion by the U.S. Senate’s Per­ma­nent Sub­com­mit­tee on Inves­ti­ga­tions for pos­si­ble manip­u­la­tion. The FBI is involved in the Bird inves­ti­ga­tion.

Bird left his Long Hill, New Jer­sey home on that Sat­ur­day, telling his wife he was going for a walk. An inten­tional dis­ap­pear­ance is incom­pat­i­ble with the fact that he left the house wear­ing a bright red jack­et and with­out his life-sus­tain­ing med­i­cine he was required to take dai­ly as a result of a liv­er trans­plant. Despite a con­tin­u­ous search since his dis­ap­pear­ance by hun­dreds of vol­un­teers, local law enforce­ment and the FBI, Bird has not been locat­ed.

When a series of trag­ic events involv­ing one indus­try occur with­in an 18-day time­frame, the sta­tis­ti­cal prob­a­bil­ity of these events being ran­dom is remote. Accord­ing to a num­ber of media reports, JPMor­gan is con­duct­ing an inter­nal inves­ti­ga­tion of the death of Gabriel Magee. Giv­en that JPMor­gan, Deutsche Bank and Rus­sell Invest­ments are sub­jects them­selves of inves­ti­ga­tions, a more seri­ous, inde­pen­dent look at these deaths is called for.

5a. The day this pro­gram was record­ed, anoth­er finan­cial ser­vices exec­u­tive was found dead, alleged­ly hav­ing com­mit­ted sui­cide by shoot­ing him­self with a nail gun!

“4th Finan­cial Ser­vices Exec­u­tive Found Dead; ‘From Self-Inflict­ed Nail-Gun Wounds’ ” by Tyler Dur­den; zerohedge.com; 02/07/2014.

The ugly rash of finan­cial ser­vices exec­u­tive sui­cides appears to have spread once again. Fol­low­ing the jump­ing deaths of 2 Lon­don bankers and a for­mer-Fed econ­o­mist in the US, The Den­ver Post reports Richard Tal­ley, founder and CEO of Amer­i­can Title, was found dead in his home from self-inflict­ed wounds — from a nail-gun.

Talley’s com­pany was under inves­ti­ga­tion from insur­ance reg­u­la­tors. Via The Den­ver Post, Richard Tal­ley, 57, and the com­pany he found­ed in 2001 were under inves­ti­ga­tion by state insur­ance reg­u­la­tors at the time of his death late Tues­day, an agency spokesman con­firmed Thurs­day. It was unclear how long the inves­ti­ga­tion had been ongo­ing or its pri­mary focus. A coroner’s spokes­woman Thurs­day said Tal­ley was found in his garage by a fam­ily mem­ber who called author­i­ties. They said Tal­ley died from sev­en or eight self-inflict­ed wounds from a nail gun fired into his tor­so and head.

Also unclear is whether Talley’s sui­cide was relat­ed to the inves­ti­ga­tion by the Col­orado Divi­sion of Insur­ance, which reg­u­lates title com­pa­nies.

5b. More about the back­ground of the late, unfor­tu­nate Mr. Tal­ley:

“Under Inves­ti­ga­tion, Amer­i­can Title CEO Dead in Gris­ly Sui­cide” by David Migoya; The Den­ver Post; 2/7/2014.

Before com­ing to Col­orado, Tal­ley was a for­mer region­al finan­cial offi­cer at Drex­el Burn­ham Lam­bert in Chica­go, where he met his wife, Cheryl, a vice pres­i­dent at the com­pany. The two mar­ried in 1989.

Tal­ley had formed a num­ber of com­pa­nies, some now defunct, accord­ing to the Col­orado sec­re­tary of state’s office. Among them: Amer­i­can Escrow, Clear Title, Clear Creek Finan­cial Hold­ings, Swift Basin, Sumar, Amer­i­can Real Estate Ser­vices, and the Amer­i­can Alliance of Real Estate Pro­fes­sion­als. . . .

6. For­mer Deutsche Bank chief Josef Ack­er­mann resigned his posi­tion with the Zurich Insur­ance Group fol­low­ing the “sui­cide” of a key exec­u­tive of that firm.

“Zurich Chair­man Josef Ack­er­mann Quits over Sui­cide Claims” by Alis­tair Osborne; The Tele­graph [UK]; 8/29/2013.

Josef Ack­er­mann, the for­mer chief exec­u­tive of Deutsche Bank, said he was resign­ing because he did not want to “dam­age” the rep­u­ta­tion of the Swiss insur­er already reel­ing from the death of Pierre Wauthier.Mr Wau­thier, 53, who was mar­ried with two chil­dren, was found dead at his home in lake­front sub­urb of Zug out­side Zurich. On Tues­day police said he appeared to have tak­en his own life. In a brief state­ment, Mr Ack­er­mann, 65, said: “The unex­pected death of Pierre Wau­thier has deeply shocked me. I have rea­sons to believe that the fam­ily is of the opin­ion that I should take my share of respon­si­bil­ity, as unfound­ed as any alle­ga­tions might be.”

His enig­matic remarks, which the insur­er declined to clar­ify, sent shock­waves through the finan­cial com­mu­nity as reports sug­gested that Mr Ackermann’s attempt to “shake up” the insur­er had put Mr Wau­thier under insuf­fer­able pres­sure. His wid­ow, Fabi­enne Wau­thier, was also said to have accused Zurich’s man­age­ment of dri­ving her hus­band “into a cor­ner” and that Mr Ackermann’s “tough man­age­ment style” had been a key fac­tor in his death, accord­ing to a Swiss news web­site.

One for­mer col­league of Mr Wau­thier was quot­ed say­ing: “Pierre was under a lot of pres­sure because there was a lot more pres­sure from above on the share price, this was an open secret. Wau­thier had effec­tively reached his career ambi­tions, CFO was his dream.” . . . .

7. Fol­low­ing an announce­ment by the Argen­tine gov­ern­ment con­cern­ing for­eign exchange tal­lies held by that coun­try’s banks, a very sus­pi­cious fire occurred in a stor­age facil­i­ty.

“Argen­tine Bank­ing Sys­tem Archives Destroyed By Dead­ly Fire” by Tyler Dur­den; zerohedge.com; 2/5/2014.

While we are sure it is a very sad coin­ci­dence, on the day when Argenti­na decrees lim­its on the FX posi­tions banks can hold and the Argen­tine Cen­tral Bank’s reserves account­ing is ques­tioned pub­li­cal­ly, a mas­sive fire — killing 9 peo­ple — has destroyed a ware­house archiv­ing bank­ing sys­tem doc­u­ments.

As The Wash­ing­ton Post reports, the fire at the Iron Moun­tain ware­house (which pur­port­ed­ly had mul­ti­ple pro­tec­tions against fire, includ­ing advanced sys­tems that can detect and quench flames with­out dam­ag­ing impor­tant doc­u­ments) took hours to con­trol and the sprawl­ing build­ing appeared to be ruined. The cause of the fire wasn’t imme­di­ate­ly clear — though we sug­gest smelling Fer­nan­dez’ hands... We not­ed yes­ter­day that there are major ques­tions over Argenti­na’s reserve hon­esty...

While first print is pre­lim­i­nary and sub­ject to revi­sion, the size of recent dis­crep­an­cies have no prece­dent. This sug­gest that the gov­ern­ment may be attempt­ing to man­age expec­ta­tions by tem­porar­i­ly fudg­ing the “esti­mate ” of reserve num­bers (first print) while not com­pro­mis­ing “actu­al” final report­ed num­bers.

If this is so, it is a dan­ger­ous game to play and one like­ly to back-fire. Dur­ing a bal­ance of pay­ments cri­sis — as Argenti­na is under­go­ing — such manip­u­la­tion of offi­cial sta­tis­tics (and one so crit­i­cal for mar­ket sen­ti­ment) is detri­men­tal to the need­ed con­fi­dence build­ing around the tran­si­tion in the FX regime.

And today the gov­ern­ment decrees lim­its on FX hold­ings for the banks... Argentina’s cen­tral bank pub­lished res­o­lu­tion late yes­ter­day on web­site lim­it­ing fx posi­tion for banks to 30% of assets. Banks will have to lim­it fx futures con­tracts to 10% of assets: res­o­lu­tion Banks must com­ply with res­o­lu­tion by April 30 And then this hap­pens...

Via WaPo, Nine first-respon­ders were killed, sev­en oth­ers injured and two were miss­ing as they bat­tled a fire of unknown ori­gin that destroyed an archive of bank doc­u­ments in Argentina’s cap­i­tal on Wednes­day. The fire at the Iron Moun­tain ware­house took hours to con­trol... The destroyed archives includ­ed doc­u­ments stored for Argentina’s bank­ing indus­try, said Buenos Aires secu­ri­ty min­is­ter Guiller­mo Mon­tene­gro.

The cause of the fire wasn’t imme­di­ate­ly clear. Boston-based Iron Moun­tain man­ages, stores and pro­tects infor­ma­tion for more than 156,000 com­pa­nies and orga­ni­za­tions in 36 coun­tries. Its Argenti­na sub­sidiary adver­tis­es that its facil­i­ties have mul­ti­ple pro­tec­tions against fire, includ­ing advanced sys­tems that can detect and quench flames with­out dam­ag­ing impor­tant doc­u­ments. . . . “There are cam­eras in the area, and these videos will be added to the judi­cial inves­ti­ga­tion, to clear up the motive of the fire and col­lapse,” Mon­tene­gro told the Diar­ios y Noti­cias agency.

7. New York State is begin­ning its own inves­ti­ga­tion into the manip­u­la­tion of the For­eign Exchange market–a $5 tril­lion a day oper­a­tion.

“New York’s Top Finan­cial Reg­u­la­tor Inves­ti­gates Cur­ren­cy Trad­ing” by Chad Bray; The New York Times; 2/5/2014.

The busi­ness of trad­ing cur­ren­cies is in a state of flux as top exec­u­tives leave and traders are sus­pend­ed or fired in the face of inves­ti­ga­tions into poten­tial manip­u­la­tion of the $5 tril­lion-a-day for­eign exchange mar­ket. The lat­est reg­u­la­tor to start an inquiry into whether more than a dozen banks manip­u­lat­ed the price of for­eign cur­ren­cies is New York State’s top finan­cial reg­u­la­tor, Ben­jamin M. Lawsky. . . .

8. Anoth­er bit­coin exchange has halt­ed trad­ing, plung­ing the dig­i­tal cur­ren­cy in val­ue. Just wait until the bit­coin­ers start killing each oth­er to steal each oth­ers’ bit­coins. This sup­posed panacea to the world’s finan­cial ills is already exhibit­ing all of the estab­lished finan­cial world’s ills, and some that the main­stream fis­cal com­mu­ni­ty has thus far avoid­ed. The bit­coin­ers may need their own dig­i­tal cur­ren­cy to kill each oth­er, per­haps named “hit­coin.”

 “Bit­coin Val­ue Plunges as Mt. Vox Exchange Halts Activ­i­ty” by Carter Dougher­ty; bloomberg.com; 2/7/2014.

Bit­coin plunged more than 8 per­cent today after a Tokyo-based exchange halt­ed with­drawals of the dig­i­tal cur­ren­cy, cit­ing tech­ni­cal mal­func­tion. Mt. Gox, a pop­u­lar exchange for dol­lar-based trades, said in a blog post it need­ed to “tem­porar­i­ly pause on all with­draw­al requests to obtain a clear tech­ni­cal view of the cur­ren­cy process­es.” It promised an “update” — not a reopen­ing — on Mon­day, Feb. 10, Japan time. . . .

 

Discussion

8 comments for “FTR #772 Body Count II: (Collateralized “Death” Obligations)”

  1. Bit­coin’s lat­est cri­sis just took a turn for the weird today. MtGox is giv­ing more info on why it shut down oper­a­tions. The cause: some sort of bug that cre­ates “mal­leabil­i­ty” errors that make it pos­si­ble for incor­rect trans­ac­tion data to be reg­is­tered on the mas­ter ledger and in the­o­ry allows for the much feared dou­ble-spend­ing attack. Uh oh:

    PCWorld
    Bit­coin price plunges: Mt. Gox sus­pends with­drawals, says flaw in pro­to­col allows fraud
    By Tim Hornyak, IDG News Ser­vice

    Feb 10, 2014 6:24 AM

    Bit­coin soft­ware has a bug that allows fraud, Tokyo-based bit­coin exchange Mt. Gox said Mon­day. The news was fol­lowed by a new fall in the val­ue of the dig­i­tal cur­ren­cy.

    Mt. Gox said it will con­tin­ue its sus­pen­sion of bit­coin trans­fers from wal­lets it holds to exter­nal bit­coin address­es, announced Fri­day, while it works to resolve the prob­lem.

    Con­ver­sions of bit­coins to con­ven­tion­al cur­ren­cies and bit­coin trans­fers to oth­er Mt. Gox address­es are not affect­ed.

    “A bug in the bit­coin soft­ware makes it pos­si­ble for some­one to use the Bit­coin net­work to alter trans­ac­tion details to make it seem like a send­ing of bit­coins to a bit­coin wal­let did not occur when in fact it did occur,” Mt. Gox said in a state­ment.

    “Since the trans­ac­tion appears as if it has not pro­ceed­ed cor­rect­ly, the bit­coins may be resent. MtGox is work­ing with the Bit­coin core devel­op­ment team and oth­ers to mit­i­gate this issue.”

    The flaw, called “trans­ac­tion mal­leabil­i­ty,” is already known to some of the core Bit­coin soft­ware devel­op­ers, Mt. Gox said. It allows a third par­ty to alter the hash asso­ci­at­ed with a fresh­ly issued trans­ac­tion with­out inval­i­dat­ing its sig­na­ture, result­ing in two sim­i­lar trans­ac­tions, only one of which can ulti­mate­ly be val­i­dat­ed and includ­ed in the log of Bit­coin trans­ac­tions called the blockchain.

    An attack­er with access to suf­fi­cient com­put­ing pow­er could ensure that the mod­i­fied trans­ac­tion is includ­ed, and the orig­i­nal reject­ed. With cur­rent Bit­coin appli­ca­tions, it is easy to deter­mine that the orig­i­nal trans­ac­tion failed, but much less obvi­ous that a mod­i­fied trans­ac­tion suc­ceed­ed, Mt. Gox said.

    “This means that an indi­vid­ual could request bit­coins from an exchange or wal­let ser­vice, alter the result­ing transaction’s hash before inclu­sion in the blockchain, then con­tact the issu­ing ser­vice while claim­ing the trans­ac­tion did not pro­ceed,” the exchange warned.

    Mt. Gox had said its inves­ti­ga­tion had been trig­gered by “unusu­al activ­i­ty” detect­ed in its Bit­coin wal­lets.

    It added that the prob­lem is not lim­it­ed to the exchange, and affects all trans­ac­tions in which bit­coins are sent to a third par­ty.

    The com­pa­ny did not imme­di­ate­ly respond to calls or emails request­ing fur­ther infor­ma­tion..

    The dig­i­tal cur­ren­cy fell as low as $535 late Mon­day Japan time before recov­er­ing to $636.37 at press time, accord­ing to Coin­Desk, which pub­lish­es an aver­age of the prices at sev­er­al coin exchanges. It had been trad­ing around $850 for much of last week before div­ing to $750 on Fri­day.

    ...

    And here’s where it goes from “uh oh!” to “huh?”: Bit­coin’s devel­op­ers are claim­ing that, yes, this is a prob­lem. But it’s a prob­lem that they’ve been aware of since 2011 with sim­ple soft­ware work-arounds that MtGox should have imple­ment­ed but nev­er did for what­ev­er rea­son. So bit­coin trad­ing at MtGox was appar­ent­ly halt­ed due to sus­pi­cious trans­ac­tions that were caused by a flaw that the bit­coin devel­op­ers insist does­n’t real­ly mat­ter because it would have been insane for MtGox not to have fixed this bug by now:

    Busi­ness Insid­er
    Bit­coin Devel­op­er: Yes, There’s A Flaw In Bit­coin But It Should­n’t Have Brought Down MtGox
    Rob Wile

    Feb. 10, 2014, 9:23 AM

    Bit­coin prices are down big this morn­ing as MtGox, a major Bit­coin exchange, announced it was con­tin­u­ing to sus­pend­ed with­drawals denom­i­nat­ed in Bit­coin while it addressed a tech­ni­cal glitch.

    In its state­ment this morn­ing, the exchange explained why it has been forced to do so.

    It said it had “detect­ed unusu­al activ­i­ty on its Bit­coin wal­lets and per­formed inves­ti­ga­tions dur­ing the past weeks. This con­firmed the pres­ence of trans­ac­tions which need to be exam­ined more close­ly.”

    In doing so, they found that trans­ac­tions from its wal­lets were sub­ject to “mal­leabil­i­ty” errors. This made it pos­si­ble for incor­rect trans­ac­tion data to be reg­is­tered on Bit­coin’s mas­ter trans­ac­tion ledger, the Blockchain. In the­o­ry, this makes it pos­si­ble for theft or dou­ble spend­ing to occur — some­thing Bit­coin was sup­posed to be designed to pre­vent. The exchange did not say whether either had in fact occurred.

    MtGox goes on to say that the glitch is a flaw in the Bit­coin pro­to­col itself, and that it had “dis­cussed [incor­po­rat­ing a fix] with the Bit­coin core devel­op­ers and will allow Bit­coin with­drawals again once it has been approved and stan­dard­ized.”

    But Bit­coin devel­op­ers are dis­put­ing how severe that flaw is.

    In an IM chat with BI, Bit­coin devel­op­er Greg Maxwell, who cor­rect­ly iden­ti­fied MtGox’s hic­cup on red­dit before MtGox acknowl­edged the prob­lem, says he and co-devel­op­er Pieter Wuille spoke with MtGox chief Mark Karpe­les over the week­end. Maxwell says he “had no idea, and real­ly still have no idea what they’d be wait­ing on us [Bit­coin devel­op­ers] for.” He added that they had dis­cussed chang­ing part of the Bit­coin pro­to­col to address the issue, but that he was “not aware of any rea­son that MtGox’s with­draws would need to be gat­ed on that.”

    BI reached out to Karpe­les on the Inter­net Relay Chat, rec­om­mend­ed by two Bit­coin experts as the best way to reach him, but did not receive a response.

    We also reached out to Bit­Stamp, which is now the world’s largest dol­lar-trad­ed exchange, to see whether they were con­cerned at all by the mal­leabil­i­ty issue. CEO Nejc Kodric replied via email that they are not com­ment­ing on the sit­u­a­tion. “We hope that MtGox solves their tech­ni­cal issues as soon as pos­si­ble,” he said.

    Maxwell said urgent­ly address­ing the issue is “nei­ther nec­es­sary nor suf­fi­cient” for pre­vent­ing theft in the case of can­cel­la­tions or reis­sues, and that while Bit­coin wal­let pro­grams do not han­dle mal­leabil­i­ty well, it is not a seri­ous issue.

    “Issues like this— ones where I basi­cal­ly con­sid­er them non-inter­est­ing issues— are the hard­est to respond to. When there is a nor­mal severe prob­lem there is always a pro­posed plan of attack, workarounds, etc. In this case ‘meh’. I can see some peo­ple are very con­cerned about Bit­coin itself and not just MtGox. ‘There real­ly is noth­ing to wor­ry about in this case’ is not like­ly to help them feel bet­ter, but it’s real­ly the best and most ... cor­rect advice I can give here.”

    ...

    There’s a much more detailed expla­na­tion here for why this bug isn’t some­thing that should be impact­ing the entire bit­coin net­work. The gist of it is this is only a prob­lem asso­ci­at­ed with the use of “trans­ac­tion” ids in the bit­coin pro­to­col because that id can be changed by 3rd par­ties (this is where the “mal­leabil­i­ty” comes in). But the use of trans­ac­tions ids is option­al because anoth­er com­bi­na­tion of vari­ables that aren’t sub­ject to the same “mal­leabil­i­ty” issue can also serve as a unique trans­ac­tion iden­ti­fi­er. So basi­cal­ly, it sounds like MtGox failed to update their inter­nal soft­ware to avoid the use of the trans­ac­tion ids and, upon dis­cov­er­ing the “sus­pi­cious trans­ac­tions” and freez­ing its exchange last week, MtGox shut down the exchange and then pub­licly declared that bit­coin was vul­ner­a­ble to a dou­ble-spend­ing attacks via a fair­ly sim­ple exploit that could have been avoid­ed if MtGox had sim­ply updat­ed its soft­ware. So it does­n’t appear that a new exploit was dis­cov­ered in bit­coin’s pro­to­col. Instead, we learned that MtGox — one of the biggest and old­est bit­coin exchanges — was still leav­ing itself vul­ner­a­ble to an known, eas­i­ly avoid­able bug years after it was dis­cov­ered. And, more impor­tant­ly, we dis­cov­ered this issue only because MtGox dis­cov­ered that indi­vid­u­als have been uti­liz­ing that dou­ble-spend­ing bug against MtGox for who knows how long, cost­ing MtGox who knows how many bit­coins. MtGox’s inter­nal ledger is appar­ent­ly a total mess and that’s why they had to freeze the accounts.

    So this news isn’t exact­ly quite doom for bit­coin. But one of the biggest exchanges might be going down from a self-inflict­ed cod­ing wound so it’s not triv­ial either. Instead, it’s a reminder that, for all the claims that “bit­coin runs on math!”, bit­coin is actu­al­ly run on math, hope, hype, hor­ri­ble eco­nom­ic the­o­ries, and some­times, shock­ing­ly inse­cure code that no one ever both­ered to update.

    Posted by Pterrafractyl | February 10, 2014, 5:48 pm

  2. One more for JP Mor­gan. No cause of death report­ed yet

    Bloomberg
    Ryan Crane, JPMor­gan Equi­ties Trad­ing Exec­u­tive, Dies at 37
    By Hugh Son Feb 13, 2014 10:16 AM CT

    Ryan Crane, a JPMor­gan (JPM) Chase & Co. employ­ee who in a 14-year career at the New York-based bank rose to exec­u­tive direc­tor of a unit that trades blocks of stocks for clients, has died. He was 37.

    He died on Feb. 3 at his Stam­ford, Con­necti­cut, home, accord­ing to the web­site of Leo P. Gal­lagher & Son Funer­al Home in Green­wich, Con­necti­cut. The cause of death will be deter­mined when a tox­i­col­o­gy report is com­plet­ed in about six weeks, said a spokes­woman for the state’s chief med­ical exam­in­er.

    Crane start­ed at JPMor­gan in equi­ties trad­ing after grad­u­at­ing from Har­vard Uni­ver­si­ty in 1999, accord­ing to his pro­file on the LinkedIn Corp. web­site. Fol­low­ing pro­mo­tions, he worked as an exec­u­tive direc­tor, or a rank above vice pres­i­dent and below man­ag­ing direc­tor, in the bank’s Amer­i­c­as Pro­gram Trad­ing group. Pro­gram traders han­dle trans­ac­tions in bas­kets of at least 15 stocks, often for mutu­al-fund clients seek­ing to rebal­ance index-linked port­fo­lios.

    “Ryan was a beloved col­league who will be dear­ly missed,” Justin Per­ras, a JPMor­gan spokesman, said in an e‑mailed state­ment. “Our thoughts and sym­pa­thy are with his fam­i­ly and friends.”

    Ryan Hen­ry Crane was born on Jan. 8, 1977, to Mary Jo and Lex Crane. He grew up in Long Val­ley, New Jer­sey, and in 1995 grad­u­at­ed from the Del­bar­ton School in Mor­ris­town, New Jer­sey, where he was rec­og­nized as Schol­ar-Ath­lete of the Year as a senior and named to the All-Amer­i­can Lacrosse Team.

    At Har­vard, in Cam­bridge, Mass­a­chu­setts, he earned a let­ter in lacrosse and a bachelor’s degree in Euro­pean his­to­ry.

    ...

    Also, a chief munic­i­pal debt ana­lyst at Mor­gan Stan­ley has sud­den­ly died:

    Bloomberg
    John Ruiz, Mor­gan Stan­ley Munic­i­pal Debt Ana­lyst, Dies at 53
    By Lau­rence Arnold Feb 12, 2014 6:54 PM CT

    John Ruiz, a munic­i­pal debt ana­lyst who recent­ly deliv­ered a pre­sen­ta­tion on Puer­to Rico for Mor­gan Stan­ley (MS), one of the biggest under­writ­ers of the island’s debt, has died. He was 53.

    He died sud­den­ly on Feb. 4 at his home in Edge­wa­ter, New Jer­sey, accord­ing to his broth­er, James Ruiz. He had returned the day before from a busi­ness trip to Flori­da.

    An exec­u­tive direc­tor at New York-based Mor­gan Stan­ley since 2010, Ruiz devel­oped exper­tise in the pub­lic finances of the areas he cov­ered, which ear­li­er in his career includ­ed Cal­i­for­nia and Flori­da.

    For Mor­gan Stan­ley, Ruiz co-wrote a pre­sen­ta­tion on Puer­to Rico at the firm’s Glob­al Dis­tressed Debt Con­fer­ence last Octo­ber in New York City.

    “The commonwealth’s econ­o­my entered reces­sion in 2006 and is cur­rent­ly strug­gling to gain trac­tion giv­en its heavy depen­dence on the man­u­fac­tur­ing and gov­ern­ment sec­tors, which have been con­tract­ing for sev­er­al years and face sig­nif­i­cant chal­lenges mov­ing for­ward,” accord­ing to the pre­sen­ta­tion by Ruiz and Ryan Brady, a vice pres­i­dent.

    Mor­gan Stan­ley, in con­junc­tion with Bar­clays Plc and RBC Cap­i­tal Mar­kets, is work­ing with Puer­to Rico on what may be a record sale of junk-rat­ed munic­i­pal bonds to refi­nance debt and raise cash, Bloomberg News report­ed this week. Mor­gan Stan­ley was the biggest under­writer of the U.S. commonwealth’s debt last year as of Novem­ber.

    ‘Dug Deep’

    “On cred­its like Jef­fer­son Coun­ty and Puer­to Rico, he dug deep and got to all of the impor­tant cred­it aspects of our issuer base very quick­ly,” J.R. McDer­mott, a Mor­gan Stan­ley man­ag­ing direc­tor, said about Ruiz, accord­ing to the Bond Buy­er.

    ...

    Ruiz worked on the Jef­fer­son Coun­ty munic­i­pal debt deal? Pre­sum­ably it was on the post-bank­rupt­cy deal­ings when Mor­gan Stan­ley was involved. The pre-bank­rupt­cy deal­ings of Jef­fer­son Coun­ty’s debt were most­ly con­duct­ed by JP Mor­gan, and they weren’t some­thing you would pub­licly cel­e­brate.

    Posted by Pterrafractyl | February 13, 2014, 10:58 am

  3. Things are get­ting so bad for the bankers, I am wish­ing them a long life and good health. Scary.

    Posted by GK | February 13, 2014, 10:23 pm

  4. right-wing garbage rag decides snarky sui­cide sum­ma­ry is all the news they deem fit to print:

    http://nypost.com/2014/03/18/string-of-suicides-rocking-financial-world-baffles-experts/

    String of sui­cides rock­ing finan­cial world baf­fles experts

    By Michael Gray

    March 18, 2014 | 2:27pm

    The finan­cial world has been rat­tled by a rash of appar­ent sui­cides, with some of the best and bright­est among the finance work­ers who have tak­en their lives since the start of the year.

    A major­i­ty of the eight sui­cides of 2014 have been very pub­lic demon­stra­tions, which has sui­cide-pre­ven­tion experts puz­zled.

    “Jump­ing is much less com­mon as a method for sui­cide in gen­er­al, so I am struck by the num­ber that have occurred in recent months in this indus­try,” said Dr. Chris­tine Mouti­er, chief med­ical offi­cer of the Amer­i­can Foun­da­tion for Sui­cide Pre­ven­tion.

    Mouti­er also dis­counts the loca­tion of the act as being the dri­ver behind the rea­son for the sui­cide.

    “The sui­cide-research lit­er­a­ture doesn’t help very much with the ques­tion of why the method of these sui­cides is so out in the open,” she added.

    MARCH 12: Ken­neth Bel­lan­do, 28, an invest­ment banker at Levy Cap­i­tal, was found dead on the side­walk out­side his build­ing on Manhattan’s East Side, after alleged­ly jump­ing from the sixth-sto­ry roof, sources said.

    MARCH 11: Edmund (Eddie) Reil­ly, 47, a trad­er at Midtown’s Ver­ti­cal Group, jumped in front of an LIRR train near the Syos­set, NY, train sta­tion.

    FEB. 28:  Autumn Radtke, CEO of First Meta, a cyber-cur­ren­cy exchange firm, was found dead out­side her Sin­ga­pore apart­ment. The 28-year-old Amer­i­can jumped from a 25-sto­ry build­ing, author­i­ties said.

    FEB. 18: Li Jun­jie, a 33-year-old JPMor­gan finance pro, leaped to his death from the roof of the company’s 30-sto­ry Hong Kong office tow­er, author­i­ties said.

     FEB. 3: Ryan Hen­ry Crane, 37, a JPMor­gan exec­u­tive direc­tor who worked in New York, was found dead inside his Stam­ford, Conn., home. A cause of death in Crane’s case has yet to be deter­mined as author­i­ties await a tox­i­col­o­gy report, a spokesper­son for the Stam­ford Police Depart­ment said.

    JAN. 31: Mike Duek­er, 50, chief econ­o­mist at Rus­sell Invest­ments and a for­mer Fed­er­al Reserve bank econ­o­mist, was found dead at the side of a road that leads to the Taco­ma Nar­rows Bridge in Wash­ing­ton state after jump­ing a fence and falling down an embank­ment, accord­ing to the Pierce Coun­ty Sheriff’s Depart­ment.

     JAN. 28: Gabriel Magee, 39, a vice pres­i­dent with JPMorgan’s cor­po­rate and invest­ment bank tech­nol­o­gy arm in the UK, jumped to his death from the roof of the bank’s 33-sto­ry Canary Wharf tow­er in Lon­don.

    JAN. 26: William Broeksmit, 58, a for­mer senior risk man­ag­er at Deutsche Bank, was found hanged in a house in South Kens­ing­ton, accord­ing to Lon­don police.

    Posted by participo | March 18, 2014, 3:10 pm

  5. Remem­ber the FBI’s $170 mil­lion “Vir­tu­al Case File” records sys­tem that did­n’t actu­al­ly work? This might be one of those days when the FBI wish­es it still had one of those. It depends on what’s on those doc­u­ments it does­n’t want to release:

    Hous­ton Chron­i­cle
    Judge orders FBI to explain with­hold­ing records of alleged Occu­py Hous­ton assas­si­na­tion plot
    By Car­ol Chris­t­ian | March 18, 2014

    A fed­er­al judge has ordered the FBI to explain why it with­held some infor­ma­tion request­ed by a grad­u­ate stu­dent for his research on a plot to assas­si­nate Occu­py Hous­ton protest lead­ers.

    Ryan Noah Shapiro, a doc­tor­al stu­dent at Mass­a­chu­setts Insti­tute of Tech­nol­o­gy in Cam­bridge, Mass., filed a law­suit April 29, 2013, against the U.S. Depart­ment of Jus­tice in the U.S. Dis­trict Court in Wash­ing­ton, D.C.

    U.S. Dis­trict Judge Rose­mary M. Col­ly­er issued her order, with an accom­pa­ny­ing memo, on March 12.

    The FBI, as part of the Depart­ment of Jus­tice, con­trols the records Shapiro want­ed for his study of “con­flicts at the nexus of Amer­i­can nation­al secu­ri­ty, law enforce­ment and polit­i­cal dis­sent,” the plain­tiff’s com­plaint stat­ed.

    Hous­ton was among hun­dreds of U.S. cities where pro­test­ers occu­pied out­door spaces as part of the Occu­py Move­ment that start­ed in New York’s Zucot­ti Park on Sept. 17, 2011.

    “The move­ment has sought to expose how the wealth­i­est 1 per­cent of soci­ety pro­mul­gates an unfair glob­al econ­o­my that harms peo­ple and destroys com­mu­ni­ties world­wide,” the com­plaint stat­ed.

    Shapiro said in his com­plaint that the exis­tence of an assas­si­na­tion plot against Occu­py Hous­ton’s lead­ers became known through the FBI’s ear­li­er release of infor­ma­tion in response to a Free­dom of Infor­ma­tion Act request.

    “Accord­ing to one of the released records, ... [REDACTED] planned to gath­er intel­li­gence against the lead­ers of the protest groups and obtain pho­tographs, then for­mu­late a plan to kill the lead­er­ship via sup­pressed sniper rifles...,” Shapiro stat­ed in his com­plaint.

    Shapiro request­ed addi­tion­al infor­ma­tion from the FBI in Jan­u­ary 2013.

    ...

    In response to Shapiro’s request, the FBI iden­ti­fied 17 pages of records and turned over five par­tial pages while entire­ly with­hold­ing 12 pages, accord­ing to court records.

    Shapiro filed the suit because, his com­plaint stat­ed, the FBI’s search was inad­e­quate and failed to pro­duce rel­e­vant records, and the agency improp­er­ly invoked cer­tain exemp­tions as rea­sons not to dis­close infor­ma­tion.

    In July, the FBI filed a motion to either dis­miss the suit or request sum­ma­ry judg­ment. The judge grant­ed the motion in part and denied it in part.

    In its motion to dis­miss, the FBI stat­ed that it main­tained its records pur­suant to its “gen­er­al inves­tiga­tive author­i­ty” and its “lead role in inves­ti­gat­ing ter­ror­ism and in the col­lec­tion of ter­ror­ism threat infor­ma­tion.”

    But the agency failed to sup­ply facts sup­port­ing its belief that the Occu­py pro­test­ers might have been engaged in ter­ror­is­tic or oth­er crim­i­nal activ­i­ty, the judge’s memo stat­ed.

    The judge ordered the FBI to explain its basis for with­hold­ing infor­ma­tion under Exemp­tion 7, which pro­tects records com­piled for law enforce­ment pur­pos­es.

    “To the extent that FBI believes it can­not be more spe­cif­ic with­out reveal­ing the very infor­ma­tion it wish­es to pro­tect, it may request an in cam­era (in judge’s cham­bers) review of the doc­u­ments,” Col­ly­er said.

    Pre­sum­ably the “[Redact­ed]” per­son in the doc­u­ments in ques­tion was­n’t some­one in the FBI (that could get awk­ward). So...who might have been inter­est­ed in bump­ing off Occu­py Wall Street’s lead­er­ship?

    Posted by Pterrafractyl | March 19, 2014, 5:22 pm

  6. This arti­cle reveals that the Fed­er­al Reserve’s down­grade of Deutsche Bank took place about a year ear­li­er (6/1/2018) and was not made pub­lic because their U.S. oper­a­tions failed the Fed’s stress tests for three con­sec­u­tive years (2015, 2016, and 2017). This was after mul­ti­ple Fed enforce­ment actions for per­ceived lax con­trols tied to MONEY LAUNDERING, cur­ren­cy trad­ing, and Vol­ck­er-rule trad­ing restric­tions. Deutsche Bank has also paid bil­lions of dol­lars to set­tle alle­ga­tions stem­ming from U.S. Jus­tice Depart­ment inves­ti­ga­tions. The arti­cle alleges that the Fed repeat­ed­ly cit­ed con­cerns about the bank’s con­trols around mea­sur­ing finan­cial expo­sure to clients and valu­ing col­lat­er­al that backed loans.

    Por­tions of the Fed’s crit­i­cisms sug­gest­ed to Deutsche Bank exec­u­tives they need­ed to pull back on so-called repo financing—short-term lend­ing typ­i­cal­ly based on secu­ri­ties-repur­chase agreements—to hedge-fund clients and oth­er banks. The Fed also reupped its crit­i­cism of Deutsche Bank’s finan­cial doc­u­men­ta­tion. Exam­in­ers expressed frus­tra­tion at what they described as the bank’s inabil­i­ty to cal­cu­late, at the end of any giv­en day, its expo­sures to what banks and oth­er clients it had in spe­cif­ic juris­dic­tions, and over what dura­tion, some of the peo­ple said.

    One ques­tion I have always have had is why does right wing lit­er­a­ture always have such an anti-Fed­er­al Reserve bias in their con­spir­a­cy the­o­ries. Could it be that they are a force in oppo­si­tion to those behind the Deutsche Bank?

    https://www.wsj.com/articles/deutsche-banks-u-s-operations-deemed-troubled-by-fed-1527768310

    Deutsche Bank’s U.S. Oper­a­tions Deemed

    Rare cen­sure last year has influ­enced lender’s moves to reduce risk tak­ing and required the bank to seek approval for U.S. hir­ing deci­sions

    Trou­bled by Fed
    Wall Street Jour­nal, June 1, 2018

    The Fed­er­al Reserve has des­ig­nat­ed Deutsche Bank AG’s sprawl­ing U.S. busi­ness as being in a “trou­bled con­di­tion,” a rare cen­sure for a major finan­cial insti­tu­tion that has con­tributed to con­straints on its oper­a­tions, accord­ing to peo­ple famil­iar with the mat­ter.

    The Fed’s down­grade, which took place about a year ago, is secret and hadn’t pre­vi­ous­ly been made pub­lic. The “trou­bled con­di­tion” status—one of the low­est des­ig­na­tions employed by the Fed—has influ­enced the bank’s moves to reduce risk-tak­ing in areas includ­ing trad­ing and lend­ing to cus­tomers.
    It also means the bank has had to clear deci­sions about hir­ing and fir­ing senior U.S. man­agers with Fed over­seers. Even reas­sign­ing job duties and mak­ing sev­er­ance pay­ments for cer­tain employ­ees require Fed approval, the peo­ple said.

    The puni­tive action by the Fed, the bank’s pri­ma­ry U.S. reg­u­la­tor, has rip­pled through Deutsche Bank’s rela­tion­ships with oth­er reg­u­la­tors, includ­ing the Fed­er­al Deposit Insur­ance Corp., which has pres­sured the lender to improve con­trols and over­sight, peo­ple famil­iar with those rela­tion­ships said.
    Deutsche Bank shares fell as much as 8% Thurs­day on Germany’s Xetra exchange, to €9.07 ($10.61). That was their low­est intra­day price since Sep­tem­ber 2016, when they were trad­ing at the low­est lev­els in decades.

    The shares closed down 7.2% in Frank­furt, at €9.16, their low­est close on the Xetra exchange, accord­ing to data going back to 1991.

    The cost to insure €10 mil­lion ($11.7 mil­lion) in Deutsche Bank bonds for five years rose rough­ly 19% Thurs­day to about €190,000 annu­al­ly, accord­ing to data from IHS Mark­it. That is up from €73,000 at the start of the year.

    Mean­time, the price of the bank’s dol­lar-denom­i­nat­ed bonds due 2032 fell 1.7% Thurs­day to about 85 cents on the dol­lar, accord­ing to data from Mar­ke­tAxess. They trad­ed for 99 cents on the dol­lar at the start of the year.

    Ear­ly Fri­day, Stan­dard & Poor’s Rat­ings Ser­vices down­grad­ed Deutsche Bank’s long-term cred­it rat­ing one notch to BBB+, from A‑, cit­ing “exe­cu­tion risks” in a “deep­er restruc­tur­ing of the busi­ness mod­el than we pre­vi­ous­ly expect­ed.” S&P said the out­look is sta­ble.

    “We appre­ci­ate S&P’s state­ment that ‘man­age­ment is tak­ing tough actions to cut the cost base and refo­cus the busi­ness in order to address the bank’s cur­rent­ly weak prof­itabil­i­ty,’” the bank said in response.

    The U.S. sys­tem for rat­ing banks is called “Camels,” which stands for cap­i­tal ade­qua­cy, asset qual­i­ty, man­age­ment, earn­ings, liq­uid­i­ty and sen­si­tiv­i­ty to mar­ket risk. A bank’s top-line rat­ing, from 1 to 5, takes into account all those cat­e­gories. The best rat­ing is “1.” Trou­bled banks are rat­ed either “4” or “5.” Scores aren’t made pub­lic.

    A down­grade by the Fed has also land­ed the bank’s FDIC-insured sub­sidiary, Deutsche Bank Trust Com­pa­ny Amer­i­c­as, on the FDIC’s “Prob­lem Banks” list of at-risk insti­tu­tions, accord­ing to peo­ple famil­iar with the mat­ter. The FDIC doesn’t detail the mem­ber­ship of the list but does say how many banks are on it and the com­bined val­ue of their assets. The list’s asset total rose $42.5 bil­lion in the first quar­ter; Deutsche Bank Trust Com­pa­ny Amer­i­c­as, the bank’s well-cap­i­tal­ized Amer­i­can deposit-tak­ing unit, had $42.1 bil­lion in assets as of March 31, accord­ing to reg­u­la­to­ry fil­ings.

    Banks are added to the list after they receive a “4” or “5” over­all rat­ing from their pri­ma­ry reg­u­la­tor.
    How those banks fare lat­er shows how they do some­times recov­er from harsh rat­ings.

    Of the 1,783 insti­tu­tions des­ig­nat­ed “prob­lem banks” between Jan­u­ary 2008 and March 2017, 854 recov­ered and shed the label, 523 failed, 294 merged and 112 remained in prob­lem sta­tus, the agency said in its his­to­ry of the finan­cial cri­sis. A Fed spokesman declined to com­ment, as did an FDIC spokesman.

    A Deutsche Bank spokes­woman said the bank doesn’t dis­cuss “spe­cif­ic reg­u­la­to­ry feed­back.” She said that Deutsche Bank AG, the Ger­man par­ent com­pa­ny, “is very well cap­i­tal­ized and has sig­nif­i­cant liq­uid­i­ty reserves.” The rel­e­vant U.S. sub­sidiaries, she said, are “DB USA Corp, Deutsche Bank Trust Cor­po­ra­tion, and Deutsche Bank Trust Com­pa­ny Amer­i­c­as, our prin­ci­pal U.S. bank­ing sub­sidiary, which has a very robust bal­ance sheet as dis­closed in our annu­al and quar­ter­ly reg­u­la­to­ry fil­ings.”

    The bank spokes­woman added: “We have pre­vi­ous­ly indi­cat­ed that our reg­u­la­tors have iden­ti­fied var­i­ous areas for improve­ment relat­ing to our con­trol envi­ron­ment and infra­struc­ture. We are high­ly focused on address­ing iden­ti­fied weak­ness­es in our U.S. oper­a­tions.”

    The prob­lems that spurred the down­grade, and the com­plex­i­ty it inject­ed into dai­ly deci­sion mak­ing and long-term plan­ning, help frame one of Deutsche Bank’s biggest chal­lenges. The bank is strug­gling to cur­tail costs and risks in the huge Amer­i­can mar­ket where, accord­ing to the bank’s exec­u­tives, it must be present to main­tain its glob­al reach.

    But obsta­cles to mak­ing mon­ey in the U.S. have become tougher as Deutsche Bank has piled up legal set­tle­ments and raced to improve out­dat­ed tech­nol­o­gy. The added scruti­ny that comes with the Fed’s “trou­bled” label brings headaches that most oth­er banks don’t have to con­tend with.

    For Deutsche Bank, the effects of dis­ap­point­ing the Fed con­tin­ue to rever­ber­ate in recent deci­sions under new Chief Exec­u­tive Chris­t­ian Sewing to pull back from cer­tain kinds of lend­ing and trad­ing activ­i­ties, some peo­ple close to the bank said.

    Mr. Sewing was named CEO in ear­ly April with the ouster of John Cryan after three con­sec­u­tive full-year loss­es. The new boss said last week Deutsche Bank will cut thou­sands of jobs and reit­er­at­ed plans to reduce the lender’s glob­al equi­ties busi­ness and oth­er invest­ment-bank­ing activ­i­ties.
    Ground­work for the risk pull­back was laid last year as Deutsche Bank’s per­for­mance lagged. Fed super­vi­sors grew exas­per­at­ed with its short­com­ings in sys­tems and con­trols and the slow pace of improve­ments, peo­ple famil­iar with inter­nal dis­cus­sions said.

    Deutsche Bank’s U.S. oper­a­tions have drawn reg­u­la­to­ry ire for years. They received a rebuke from the Fed­er­al Reserve Bank of New York in 2014 about repeat­ed finan­cial-report­ing fail­ures and lack of fol­low-through on promised fix­es.

    Deutsche Bank U.S. oper­a­tions failed the Fed’s stress tests in 2015 and 2016 and in 2017 were the sub­ject of mul­ti­ple Fed enforce­ment actions for per­ceived lax con­trols tied to cur­ren­cy trad­ing, mon­ey laun­der­ing and Vol­ck­er-rule trad­ing restric­tions. Deutsche Bank has also paid bil­lions of dol­lars to set­tle alle­ga­tions stem­ming from U.S. Jus­tice Depart­ment inves­ti­ga­tions.

    Last year, the Fed repeat­ed­ly cit­ed con­cerns pri­vate­ly to the bank about its con­trols around mea­sur­ing finan­cial expo­sure to clients and valu­ing col­lat­er­al that backed loans, accord­ing to peo­ple close to the bank.

    Por­tions of the Fed’s crit­i­cisms sug­gest­ed to Deutsche Bank exec­u­tives they need­ed to pull back on so-called repo financing—short-term lend­ing typ­i­cal­ly based on secu­ri­ties-repur­chase agreements—to hedge-fund clients and oth­er banks. With­in the invest­ment bank last year, some exec­u­tives pri­vate­ly com­plained that repo expo­sures were less risky than the Fed depict­ed them, spurring debate over how much to dial back, some of the peo­ple with knowl­edge of inter­nal dis­cus­sions said.

    The Fed also reupped its crit­i­cism of Deutsche Bank’s finan­cial doc­u­men­ta­tion. Exam­in­ers expressed frus­tra­tion at what they described as the bank’s inabil­i­ty to cal­cu­late, at the end of any giv­en day, its expo­sures to what banks and oth­er clients it had in spe­cif­ic juris­dic­tions, and over what dura­tion, some of the peo­ple said.

    Posted by Mary Benton | June 2, 2018, 11:47 am

  7. This June 1, 2018 Reuters arti­cle reports that the S&P cut Deutsche Bank rat­ing and ques­tioned its plan to return to prof­itabil­i­ty. Cred­it rat­ings are cru­cial for banks, whose per­ceived health is impor­tant in win­ning busi­ness, and Deutsche Bank is a big issuer of debt whose cost is high­ly reliant on them.

    The S&P report said “We see sig­nif­i­cant exe­cu­tion risks in the deliv­ery of the updat­ed strat­e­gy amid a con­tin­ued unhelp­ful mar­ket back­drop, and we think that, rel­a­tive to peers, Deutsche Bank will remain a neg­a­tive out­lier for some time,”

    The arti­cle also indi­cates that Deutsche Bank’s hybrid debt instru­ments that would be vul­ner­a­ble if the bank got into seri­ous finan­cial trou­ble.

    Deutsche Bank’s Chief Exec­u­tive Chris­t­ian Sewing
    ver­i­fied that a series of enforce­ment actions by the U.S. Fed­er­al Reserve were prin­ci­pal­ly relat­ed to weak­ness­es in inter­nal con­trols and infra­struc­ture.

    On a sep­a­rate note, the arti­cle men­tions that Aus­tralian pros­e­cu­tors were prepar­ing crim­i­nal car­tel charges against Deutsche, as well as the country’s third-largest bank and Cit­i­group, regard­ing an issuance of $2.3 bil­lion.

    https://www.reuters.com/article/us-deutsche-bank-rating-s‑p/deutsche-bank-gets-ecb-key-investor-support-as-sp-questions-strategy-idUSKCN1IX3UC

    Deutsche Bank gets ECB, key investor sup­port as S&P ques­tions strat­e­gy

    Dou­glas Busvine, Edward Tay­lor
    Reuters June 1, 2018
    •
    FRANKFURT (Reuters) — Deutsche Bank, the ECB and its biggest investor sought to reas­sure share­hold­ers and staff of its finan­cial strength on Fri­day after S&P cut its rat­ing and ques­tioned its plan to return to prof­itabil­i­ty.

    Shares in Deutsche Bank closed at an all-time low on Thurs­day as past mis­ad­ven­tures in high-risk invest­ment bank­ing haunt­ed new Chief Exec­u­tive Chris­t­ian Sewing’s attempt to refo­cus on its more staid cor­po­rate bank­ing roots.

    A source famil­iar with the think­ing of the Euro­pean Cen­tral Bank (ECB), which reg­u­lates Deutsche Bank, and its top share­hold­er HNA Group Co Ltd [HNAIRC.UL] of Chi­na, sep­a­rate­ly said they backed management’s strat­e­gy of retrench­ment.

    This fol­lowed a report on Thurs­day that the U.S. reg­u­la­tor viewed the lender as “trou­bled” last year, and on Fri­day a Stan­dard & Poor’s cred­it rat­ing down­grade to BBB+ from A-.

    Deutsche Bank shares were up 3.7 per­cent at 1235 GMT, although the cost of insur­ing against default .

    Mean­while in Aus­tralia, fed­er­al pros­e­cu­tors were prepar­ing crim­i­nal car­tel charges against Deutsche, as well as the country’s third-largest bank and Cit­i­group, over a $2.3 bil­lion share issue. All deny wrong­do­ing.

    Sewing, a Deutsche Bank ‘lif­er’ appoint­ed in April after the removal of for­mer CEO John Cryan, said in a let­ter to staff: “At group lev­el, our finan­cial strength is beyond doubt”.

    But the news­flow was “not good”, Sewing added as S&P ques­tioned his abil­i­ty to get Deutsche Bank back to prof­it after three years of loss­es by scal­ing back its glob­al invest­ment bank and refo­cus­ing on Europe and Ger­many. “We see sig­nif­i­cant exe­cu­tion risks in the deliv­ery of the updat­ed strat­e­gy amid a con­tin­ued unhelp­ful mar­ket back­drop, and we think that, rel­a­tive to peers, Deutsche Bank will remain a neg­a­tive out­lier for some time,” S&P said

    TROUBLED CONDITION
    Cred­it rat­ings are cru­cial for banks, whose per­ceived health is impor­tant in win­ning busi­ness, and Deutsche Bank is a big issuer of debt whose cost is high­ly reliant on them.

    S&P had rat­ed Deutsche Bank’s long-term cred­it at A‑, on neg­a­tive cred­it watch. That was one or two notch­es below most Euro­pean com­peti­tors, with Switzerland’s UBS rat­ed A+ with a sta­ble out­look.

    Sewing also addressed U.S. reg­u­la­to­ry con­cerns fol­low­ing the Wall Street Jour­nal report that said the Fed­er­al Reserve had des­ig­nat­ed Deutsche Bank’s oper­a­tions as in a “trou­bled con­di­tion”.

    The WSJ report had sent Deutsche Bank’s shares down 7 per­cent to their low­est clos­ing lev­el, valu­ing it at $22 bil­lion.

    Although Deutsche Bank’s senior debt has held up well, its junior and hybrid debt instru­ments that would be vul­ner­a­ble if the bank got into seri­ous finan­cial trou­ble have under­per­formed.

    Deutsche Bank’s 1.75 bil­lion euro con­tin­gent con­vert­ible (CoCo) bond with a 6 per­cent coupon saw its cash price hit a 15-month low of 89.735 cent on the euro on Thurs­day, trans­lat­ing to a yield of 9.24 per­cent.

    It has since recov­ered to a cash price of 93.167 and a yield of 8.1 per­cent; still near­ly dou­ble this year’s low in Jan­u­ary.

    FULLY FUNDED
    Sewing said Deutsche Bank’s cred­it and mar­ket risk lev­els had rarely been so low, spec­u­la­tion it was exposed to polit­i­cal uncer­tain­ty in Italy was unfound­ed, and fund­ing plans for this year were well advanced.

    Deutsche Bank was also well posi­tioned to react to exces­sive moves in debt mar­kets, Sewing said, adding that a series of enforce­ment actions by the U.S. Fed­er­al Reserve were prin­ci­pal­ly relat­ed to weak­ness­es in inter­nal con­trols and infra­struc­ture.

    “We have made progress in reme­di­at­ing them over the past year,” he wrote. “We’re not yet where we want to be, but we are steadi­ly get­ting there.” And a source famil­iar with the ECB’s think­ing made it clear that Deutsche Bank had made “good progress” in its efforts to address reg­u­la­to­ry con­cerns.

    “The bank now has a tighter man­age­ment team, good cap­i­tal and liq­uid­i­ty, and super­vi­sors are reas­sured by the plans they see,” the source said in a rare com­ment on an indi­vid­ual bank.

    Chi­nese investor HNA Group Co Ltd [HNAIRC.UL], which con­trols an 8 per­cent stake in Deutsche Bank, said it sup­port­ed its man­age­ment and strat­e­gy. “HNA remains com­mit­ted to Deutsche Bank’s long-term suc­cess and looks for­ward to con­tin­u­ing to work with the man­age­ment team in sup­port of that goal,” a spokesman for HNA said.

    A Ger­man gov­ern­ment spokesman declined to com­ment on Deutsche Bank on Fri­day.

    Addi­tion­al report­ing by Andreas Framke and Abhi­nav Ram­narayan; Edit­ing by Alexan­der Smith

    Posted by Mary Benton | June 2, 2018, 12:17 pm

  8. Anoth­er JP Mor­gan exec­u­tive died mys­te­ri­ous­ly: Dou­glas (Doug) Arthur Caruc­ci died at the age of 53 a few weeks ago. JPMor­gan Chase’s media rela­tions depart­ment refused to com­ment on the cir­cum­stances sur­round­ing his death or even where he died. Adding to the mys­tery is that there’s been basi­cal­ly no news cov­er­age of his death oth­er than a short report at eFi­nan­cial Careers. eFi­nan­cial Careers ini­tial­ly report­ed that Caruc­ci had died of a ski­ing acci­dent but lat­er retract­ed that state­ment.

    As the fol­low­ing piece notes, part of what makes Curuc­ci’s death mys­te­ri­ous is that it’s now the lat­est mys­te­ri­ous death at JP Mor­gan involv­ing some­one work­ing on the tech­nol­o­gy side of the bank and who worked in Lon­don. Accord­ing to Carucci’s LinkedIn pro­file, he had the titles of Glob­al Head of Cur­ren­cies, Emerg­ing Mar­kets, and Com­modi­ties Tech­nol­o­gy and Glob­al Head of FICC Elec­tron­ic Trad­ing Tech­nol­o­gy. And in his obit­u­ary it’s stat­ed that he was recent­ly pro­mot­ed to Glob­al Head of Macro Tech­nol­o­gy. And two oth­er fig­ures who died mys­te­ri­ous­ly in recent years also worked in tech­nol­o­gy and in Lon­don: Julian Knott and Gabriel Magee. So Caruc­ci may have known these two pri­or to their deaths.

    Julian Knott was found dead with his wife in July of 2014. It was declared a mur­der sui­cide. Knot­t’s fam­i­ly and friends said such an act dis­put­ed the idea that Julian could have done such an act. Knott worked in on JP Mor­gan’s com­put­er net­works since 2001 and was pro­mot­ed to Exec­u­tive Direc­tor of Glob­al Net­work Oper­a­tions Cen­ter in Jan­u­ary of 2014. That same month of Jan­u­ary 2014, Gabriel Magee, a JPMor­gan Vice Pres­i­dent who worked on the bank’s tech­nol­o­gy infra­struc­ture, jumped to his death from the rooftop of the bank’s Lon­don head­quar­ters. It was declared a sui­cide.

    But not all of JP Mor­gan’s mys­te­ri­ous IT-relat­ed deaths have involved peo­ple who worked in Lon­don. Anoth­er note­wor­thy recent death in the bank’s tech­nol­o­gy sec­tor was the May 2014 death of Thomas James Schenkman. Schenkman died sud­den­ly at the age of 42 in Con­necti­cut. Schenkman was the Man­ag­ing Direc­tor of Glob­al Infra­struc­ture Engi­neer­ing for the bank.

    So that’s all some­thing to keep in mind if you’re inter­est­ed in a job at one of JP Mor­gan’s tech­nol­o­gy divi­sions. There’s pre­sum­ably a new open­ing in JP Mor­gan’s tech­nol­o­gy sec­tor fol­low­ing Caruc­ci’s death. Those with a death wish are strong­ly encour­aged to apply:

    Wall Street on Parade

    JPMor­gan Man­ag­ing Direc­tor Dies Sud­den­ly; Has Links to Oth­er JPM Deaths

    By Pam Martens
    March 18, 2019

    When you are the largest bank in the Unit­ed States and you’ve been com­pared to the Gam­bi­no crime fam­i­ly in a book by two tri­al lawyers; when you’ve plead­ed guilty to three crim­i­nal felony counts brought by the Unit­ed States Jus­tice Depart­ment in the past five years; when you’ve paid over $30 bil­lion in fines over charges of crimes against the pub­lic and investors since 2008; and when you’ve had an unprece­dent­ed string of employ­ees leap­ing to their death from build­ings, drop­ping dead at home or on the street, and two alleged mur­der-sui­cides by employ­ees — all in just the past five years – one might think that law enforce­ment might show some inter­est – espe­cial­ly since this employ­er – JPMor­gan Chase – holds tens of bil­lions of dol­lars of Bank-Owned Life Insur­ance (BOLI) on its work­ers. (This death ben­e­fit, by the way, pays tax-free to the cor­po­ra­tion, not the employee’s fam­i­ly.)

    But when it comes to JPMor­gan Chase and law enforce­ment, there does not seem to be a morsel of curios­i­ty over the con­tin­u­ing sud­den deaths of its com­put­er tech­nol­o­gy work­ers – no mat­ter how high up the cor­po­rate lad­der they rank or how many floors they are alleged to fall to their death.

    Take the case of Dou­glas (Doug) Arthur Caruc­ci, age 53, who died on Sat­ur­day, March 9 under what Sarah Butch­er at eFi­nan­cial Careers calls “trag­ic” and unex­pect­ed cir­cum­stances. Caruc­ci is believed to have been a res­i­dent of Man­hat­tan with his wife, Cindy.

    We called the New York City Police Depart­ment and were told they had no infor­ma­tion in their data­base about the death of a Dou­glas Caruc­ci in March 2019. We next emailed the New York City Med­ical Examiner’s office – which is man­dat­ed under law to inves­ti­gate all deaths from acci­dents or sud­den deaths. Aja Wor­thy-Davis, the Exec­u­tive Direc­tor for Pub­lic Affairs of the Med­ical Examiner’s Office respond­ed as fol­lows:

    “There is no OCME record of this indi­vid­ual (under the name shared). Please keep in mind that the OCME does not inves­ti­gate (or keep records of) all deaths with­in the City of New York. The OCME is specif­i­cal­ly respon­si­ble for inves­ti­gat­ing only NYC-based deaths occur­ring from crim­i­nal vio­lence, by acci­dent, by sui­cide, or in any unusu­al or sus­pi­cious man­ner.”

    JPMor­gan Chase’s media rela­tions depart­ment refused to com­ment on where Caruc­ci died or the cir­cum­stances sur­round­ing his death. A spokesper­son pro­vid­ed this state­ment: “Doug has been a part of CIB Tech­nol­o­gy since 2011 and has been a friend and men­tor to many col­leagues across the firm, and a great­ly respect­ed leader. He pos­sessed a very rare com­bi­na­tion of mar­kets, ana­lyt­ics and tech­nol­o­gy knowl­edge, busi­ness acu­men, and peo­ple lead­er­ship skills. Our hearts and thoughts are with his fam­i­ly.”

    Based on inter­net post­ings, Carucci’s funer­al was to be held at the River­side Memo­r­i­al Chapel in New York City on Fri­day, March 15. We con­firmed by a tele­phone call to the Chapel that the funer­al occurred. Main­stream busi­ness media, such as Reuters, Bloomberg News, the Wall Street Jour­nal, Finan­cial Times, etc. have yet to report on Carucci’s death, poten­tial­ly because there has been a news black­out from offi­cial sources.

    Friends close to Caruc­ci are refus­ing to share what they know about his death, sug­gest­ing the details would be dis­tress­ful to the fam­i­ly. How­ev­er, some­one appar­ent­ly attempt­ed to pro­vide a benign rea­son for the death ini­tial­ly. eFi­nan­cial Careers ini­tial­ly report­ed that Caruc­ci had died of a ski­ing acci­dent; then retract­ed that state­ment.

    Accord­ing to Carucci’s LinkedIn pro­file, he was a Man­ag­ing Direc­tor at the bank and employed there since June 2011. He shows the titles of Glob­al Head of Cur­ren­cies, Emerg­ing Mar­kets, and Com­modi­ties Tech­nol­o­gy and Glob­al Head of FICC Elec­tron­ic Trad­ing Tech­nol­o­gy. Accord­ing to the obit­u­ary post­ed by the fam­i­ly, Caruc­ci was recent­ly pro­mot­ed to Glob­al Head of Macro Tech­nol­o­gy.

    A 2015 bio that Caruc­ci pro­vid­ed for a talk he was giv­ing at the Indi­an Insti­tute of Tech­nol­o­gy in Bom­bay, India, described his career as fol­lows:

    “Head of CEM Elec­tron­ic Trad­ing Tech­nol­o­gy at JP Mor­gan Chase, cov­er­ing FX [for­eign exchange], Com­modi­ties, and Emerg­ing Mar­kets. Mr. Caruc­ci is respon­si­ble for a glob­al team of engi­neers devel­op­ing low laten­cy trad­ing tech­nol­o­gy. He began his career on Wall Street devel­op­ing options trad­ing sys­tems while in high school and in the AMEX options pits while attend­ing col­lege. He spent 10 years build­ing pro­pri­etary trad­ing sys­tems for FX and Inter­est Rates deriv­a­tives on Wall Street. Mr. Caruc­ci served as Man­ag­ing Direc­tor and Part­ner at Citadel Invest­ment Group in Chica­go for 10 years where he led the archi­tec­ture and devel­op­ment of ana­lyt­ics and risk man­age­ment sys­tems across all busi­ness lines. He launched Citadel’s Euro­pean Options Mar­ket Mak­ing and High Fre­quen­cy trad­ing busi­ness in Lon­don. He joined Sun Trad­ing LLC in 2009 as head of Volatil­i­ty Trad­ing and lead the firm’s Quan­ti­ta­tive Research group. Mr. Caruc­ci received his degree in Finance from Baruch, City Uni­ver­si­ty of New York.”

    While there has been near­ly a com­plete news black­out on Carucci’s death, he shared com­mon links to two oth­er high pro­file deaths of JPMor­gan Chase com­put­er exec­u­tives which were wide­ly cov­ered by glob­al media out­lets. Caruc­ci knew a great deal about JPMor­gan Chase’s tech­nol­o­gy infra­struc­ture – putting him in a rar­efied cat­e­go­ry at the bank – and he had pre­vi­ous­ly worked in Lon­don. Both of those traits were also present in Julian Knott and Gabriel McGee – men whom it is like­ly that Caruc­ci knew and/or inter­act­ed with pri­or to their own “trag­ic” deaths.

    Julian Knott and his wife, Ali­ta, were 45 and 47, respec­tive­ly. They lived in Jef­fer­son Town­ship, New Jer­sey. Their bod­ies were dis­cov­ered by police on July 6, 2014 at approx­i­mate­ly 1:12 a.m. Accord­ing to a press release issued by the Mor­ris Coun­ty Prosecutor’s office, Jef­fer­son Town­ship Police Offi­cers Tim Hecht and Dave Wrob­lews­ki respond­ed to the Knott home locat­ed in the Lake Hopat­cong sec­tion fol­low­ing a “report of two uncon­scious adults.” The cou­ple had a teenage daugh­ter and two teenage sons. It could not be ascer­tained if the teenagers were home at the time of the vio­lence. After a pre­lim­i­nary inves­ti­ga­tion, the police announced on July 8 that they believe Julian Knott shot his wife repeat­ed­ly and then took his own life with the same gun.

    Friends and col­leagues report­ed that Julian Knott was a kind and thought­ful indi­vid­ual. Rel­a­tives and friends in the U.K. dis­put­ed the idea that Julian Knott could have com­mit­ted such an act, leav­ing his chil­dren orphaned and with the mem­o­ry of their father as a mon­ster.

    Accord­ing to Knott’s LinkedIn pro­file, he had worked on JPMor­gan com­put­er net­works in Lon­don since 2001, ini­tial­ly on behalf of Com­put­er Sci­ence Cor­po­ra­tion and, lat­er, IBM. In Jan­u­ary 2006, Knott for­mal­ly joined JPMor­gan Chase in Lon­don and worked there until July 2010. At that time, Knott trans­ferred to JPMorgan’s sprawl­ing cam­pus in Colum­bus, Ohio and even­tu­al­ly rose to the rank of Tech­ni­cal Direc­tor of the Glob­al Tier 3 Net­work Oper­a­tions. Knott relo­cat­ed again in Sep­tem­ber 2012 to work at the high tech Glob­al Net­work Oper­a­tions Cen­ter of JPMor­gan in Whip­pa­ny, New Jer­sey. He received a pro­mo­tion in Jan­u­ary 2014 to Exec­u­tive Direc­tor.

    Knott’s years at JPMor­gan in Lon­don over­lapped with those of Gabriel Magee, a JPMor­gan Vice Pres­i­dent who also worked in com­put­er infra­struc­ture. Magee, aged 39, is alleged to have leaped from the rooftop of the 33-sto­ry JPMor­gan Lon­don head­quar­ters at 25 Bank Street on the evening of Jan­u­ary 27, 2014 or the morn­ing of Jan­u­ary 28, 2014. Despite ini­tial Lon­don news­pa­per reports that the jump was observed by “thou­sands of com­muters” and JPMor­gan col­leagues, the coroner’s inquest on May 20, 2014 revealed that not one eye­wit­ness actu­al­ly saw Magee leap from the build­ing. In fact, as Iain Dey, Deputy Busi­ness Edi­tor of the Sun­day Times in Lon­don, report­ed: “Gabriel Magee’s body lay for sev­er­al hours before it was found at 8am last Tues­day.” The body was found on a 9th floor rooftop that jut­ted out from the 33-sto­ry build­ing and was not observ­able from the street.

    The JPMor­gan build­ing at 25 Bank Street is locat­ed in the bor­ough of Tow­er Ham­lets. Accord­ing to draw­ings and plans sub­mit­ted by JPMor­gan to the bor­ough after it pur­chased the build­ing for £495 mil­lion in 2010, the 9th floor roof is acces­si­ble “via the stair from lev­el 8 with­in the exist­ing Lev­el 9 plant enclo­sure….”

    Accord­ing to Magee’s LinkedIn pro­file, he was engaged in “Tech­ni­cal archi­tec­ture over­sight for plan­ning, devel­op­ment, and oper­a­tion of sys­tems for fixed income secu­ri­ties and inter­est rate deriv­a­tives.” A for­mer col­league told Wall Street On Parade that Magee “focused exten­sive­ly on Java and Sybase data­bas­es. He also did C++ and many oth­er UNIX relat­ed lan­guages.”

    Accord­ing to sources close to Magee, he was in a lov­ing rela­tion­ship with a beau­ti­ful young attor­ney, Veron­i­ca Strande. They were hap­pi­ly liv­ing togeth­er. Ms. Strande tes­ti­fied at the inquest that “there was no prob­lem.” Sources close to both of them say that Magee had brought Strande to the U.S. to meet his par­ents and was very hap­py in the rela­tion­ship.

    Nonethe­less, based on evi­dence pro­duced by JPMor­gan at the inquest, the coro­ner ruled that Magee’s death was a sui­cide.

    Anoth­er high-rank­ing tech­nol­o­gy death at JPMor­gan Chase occurred on May 7, 2014 when Thomas James Schenkman, age 42, died sud­den­ly in Con­necti­cut. Schenkman held the high rank of Man­ag­ing Direc­tor of Glob­al Infra­struc­ture Engi­neer­ing for JPMor­gan Chase. He had begun his tech­nol­o­gy career with Microsoft, where he worked for 11 years. Schenkman then moved on to Gold­man Sachs in 2000 and worked there for six years. In 2006, Schenkman moved to Bear Stearns and was there at the time of its col­lapse in March 2008. Schenkman had been with JPMor­gan from that point on.

    Accord­ing to the Office of the Chief Med­ical Exam­in­er in Con­necti­cut, which only gets involved in an inves­ti­ga­tion if the death is “sud­den, unex­pect­ed, or vio­lent,” the ini­tial cause of Schenkman’s death was list­ed as “pend­ing.” It was even­tu­al­ly updat­ed to read: “ath­er­o­scle­rot­ic coro­nary artery dis­ease.”

    This Chief Med­ical Examiner’s office is the same one that inves­ti­gat­ed the death of JPMor­gan Exec­u­tive Direc­tor, Ryan Crane, age 37, who died sud­den­ly at his home in Stam­ford, Con­necti­cut on Feb­ru­ary 3, 2014. The Med­ical Exam­in­er did not release the cause of death for approx­i­mate­ly three months, final­ly assign­ing it to ethanol toxicity/accident. Crane was not direct­ly engaged in com­put­er tech­nol­o­gy at JPMor­gan Chase but his work in algo­rith­mic trad­ing may have led him to inter­act with var­i­ous tech­nol­o­gy teams at the bank.

    ...

    ———-

    “JPMor­gan Man­ag­ing Direc­tor Dies Sud­den­ly; Has Links to Oth­er JPM Deaths” by Pam Martens; Wall Street on Parade; 03/18/2019

    “Take the case of Dou­glas (Doug) Arthur Caruc­ci, age 53, who died on Sat­ur­day, March 9 under what Sarah Butch­er at eFi­nan­cial Careers calls “trag­ic” and unex­pect­ed cir­cum­stances. Caruc­ci is believed to have been a res­i­dent of Man­hat­tan with his wife, Cindy.”

    In what is per­haps the most mys­te­ri­ous JP Mor­gan banker death to date, this time there’s no offi­cial state­ment from the com­pa­ny at all. They real­ly are leav­ing it a com­plete mys­tery. There’s only one out­let that actu­al­ly report­ed the death, eFi­nan­cial Careers, and they had to retract the ini­tial sto­ry of a ski­ing death:

    ...
    We called the New York City Police Depart­ment and were told they had no infor­ma­tion in their data­base about the death of a Dou­glas Caruc­ci in March 2019. We next emailed the New York City Med­ical Examiner’s office – which is man­dat­ed under law to inves­ti­gate all deaths from acci­dents or sud­den deaths. Aja Wor­thy-Davis, the Exec­u­tive Direc­tor for Pub­lic Affairs of the Med­ical Examiner’s Office respond­ed as fol­lows:

    “There is no OCME record of this indi­vid­ual (under the name shared). Please keep in mind that the OCME does not inves­ti­gate (or keep records of) all deaths with­in the City of New York. The OCME is specif­i­cal­ly respon­si­ble for inves­ti­gat­ing only NYC-based deaths occur­ring from crim­i­nal vio­lence, by acci­dent, by sui­cide, or in any unusu­al or sus­pi­cious man­ner.”

    JPMor­gan Chase’s media rela­tions depart­ment refused to com­ment on where Caruc­ci died or the cir­cum­stances sur­round­ing his death. A spokesper­son pro­vid­ed this state­ment: “Doug has been a part of CIB Tech­nol­o­gy since 2011 and has been a friend and men­tor to many col­leagues across the firm, and a great­ly respect­ed leader. He pos­sessed a very rare com­bi­na­tion of mar­kets, ana­lyt­ics and tech­nol­o­gy knowl­edge, busi­ness acu­men, and peo­ple lead­er­ship skills. Our hearts and thoughts are with his fam­i­ly.”

    Based on inter­net post­ings, Carucci’s funer­al was to be held at the River­side Memo­r­i­al Chapel in New York City on Fri­day, March 15. We con­firmed by a tele­phone call to the Chapel that the funer­al occurred. Main­stream busi­ness media, such as Reuters, Bloomberg News, the Wall Street Jour­nal, Finan­cial Times, etc. have yet to report on Carucci’s death, poten­tial­ly because there has been a news black­out from offi­cial sources.

    Friends close to Caruc­ci are refus­ing to share what they know about his death, sug­gest­ing the details would be dis­tress­ful to the fam­i­ly. How­ev­er, some­one appar­ent­ly attempt­ed to pro­vide a benign rea­son for the death ini­tial­ly. eFi­nan­cial Careers ini­tial­ly report­ed that Caruc­ci had died of a ski­ing acci­dent; then retract­ed that state­ment.
    ...

    Did Caruc­ci cross paths with Julian Knott and Gabriel Magee? We don’t know, but he worked in Lon­don and on IT so he would have been in a posi­tion to cross paths with them at a min­i­mum:

    ...
    Accord­ing to Carucci’s LinkedIn pro­file, he was a Man­ag­ing Direc­tor at the bank and employed there since June 2011. He shows the titles of Glob­al Head of Cur­ren­cies, Emerg­ing Mar­kets, and Com­modi­ties Tech­nol­o­gy and Glob­al Head of FICC Elec­tron­ic Trad­ing Tech­nol­o­gy. Accord­ing to the obit­u­ary post­ed by the fam­i­ly, Caruc­ci was recent­ly pro­mot­ed to Glob­al Head of Macro Tech­nol­o­gy.

    ...

    While there has been near­ly a com­plete news black­out on Carucci’s death, he shared com­mon links to two oth­er high pro­file deaths of JPMor­gan Chase com­put­er exec­u­tives which were wide­ly cov­ered by glob­al media out­lets. Caruc­ci knew a great deal about JPMor­gan Chase’s tech­nol­o­gy infra­struc­ture – putting him in a rar­efied cat­e­go­ry at the bank – and he had pre­vi­ous­ly worked in Lon­don. Both of those traits were also present in Julian Knott and Gabriel McGee – men whom it is like­ly that Caruc­ci knew and/or inter­act­ed with pri­or to their own “trag­ic” deaths.

    Julian Knott and his wife, Ali­ta, were 45 and 47, respec­tive­ly. They lived in Jef­fer­son Town­ship, New Jer­sey. Their bod­ies were dis­cov­ered by police on July 6, 2014 at approx­i­mate­ly 1:12 a.m. Accord­ing to a press release issued by the Mor­ris Coun­ty Prosecutor’s office, Jef­fer­son Town­ship Police Offi­cers Tim Hecht and Dave Wrob­lews­ki respond­ed to the Knott home locat­ed in the Lake Hopat­cong sec­tion fol­low­ing a “report of two uncon­scious adults.” The cou­ple had a teenage daugh­ter and two teenage sons. It could not be ascer­tained if the teenagers were home at the time of the vio­lence. After a pre­lim­i­nary inves­ti­ga­tion, the police announced on July 8 that they believe Julian Knott shot his wife repeat­ed­ly and then took his own life with the same gun.

    Friends and col­leagues report­ed that Julian Knott was a kind and thought­ful indi­vid­ual. Rel­a­tives and friends in the U.K. dis­put­ed the idea that Julian Knott could have com­mit­ted such an act, leav­ing his chil­dren orphaned and with the mem­o­ry of their father as a mon­ster.

    Accord­ing to Knott’s LinkedIn pro­file, he had worked on JPMor­gan com­put­er net­works in Lon­don since 2001, ini­tial­ly on behalf of Com­put­er Sci­ence Cor­po­ra­tion and, lat­er, IBM. In Jan­u­ary 2006, Knott for­mal­ly joined JPMor­gan Chase in Lon­don and worked there until July 2010. At that time, Knott trans­ferred to JPMorgan’s sprawl­ing cam­pus in Colum­bus, Ohio and even­tu­al­ly rose to the rank of Tech­ni­cal Direc­tor of the Glob­al Tier 3 Net­work Oper­a­tions. Knott relo­cat­ed again in Sep­tem­ber 2012 to work at the high tech Glob­al Net­work Oper­a­tions Cen­ter of JPMor­gan in Whip­pa­ny, New Jer­sey. He received a pro­mo­tion in Jan­u­ary 2014 to Exec­u­tive Direc­tor.

    Knott’s years at JPMor­gan in Lon­don over­lapped with those of Gabriel Magee, a JPMor­gan Vice Pres­i­dent who also worked in com­put­er infra­struc­ture. Magee, aged 39, is alleged to have leaped from the rooftop of the 33-sto­ry JPMor­gan Lon­don head­quar­ters at 25 Bank Street on the evening of Jan­u­ary 27, 2014 or the morn­ing of Jan­u­ary 28, 2014. Despite ini­tial Lon­don news­pa­per reports that the jump was observed by “thou­sands of com­muters” and JPMor­gan col­leagues, the coroner’s inquest on May 20, 2014 revealed that not one eye­wit­ness actu­al­ly saw Magee leap from the build­ing. In fact, as Iain Dey, Deputy Busi­ness Edi­tor of the Sun­day Times in Lon­don, report­ed: “Gabriel Magee’s body lay for sev­er­al hours before it was found at 8am last Tues­day.” The body was found on a 9th floor rooftop that jut­ted out from the 33-sto­ry build­ing and was not observ­able from the street.

    ...

    Accord­ing to Magee’s LinkedIn pro­file, he was engaged in “Tech­ni­cal archi­tec­ture over­sight for plan­ning, devel­op­ment, and oper­a­tion of sys­tems for fixed income secu­ri­ties and inter­est rate deriv­a­tives.” A for­mer col­league told Wall Street On Parade that Magee “focused exten­sive­ly on Java and Sybase data­bas­es. He also did C++ and many oth­er UNIX relat­ed lan­guages.”

    Accord­ing to sources close to Magee, he was in a lov­ing rela­tion­ship with a beau­ti­ful young attor­ney, Veron­i­ca Strande. They were hap­pi­ly liv­ing togeth­er. Ms. Strande tes­ti­fied at the inquest that “there was no prob­lem.” Sources close to both of them say that Magee had brought Strande to the U.S. to meet his par­ents and was very hap­py in the rela­tion­ship.

    Nonethe­less, based on evi­dence pro­duced by JPMor­gan at the inquest, the coro­ner ruled that Magee’s death was a sui­cide.
    ...

    And then there’s the 2014 sud­den death of Thomas James Schenkman, then the Man­ag­ing Direc­tor of Glob­al Infra­struc­ture Engi­neer­ing:

    ...
    Anoth­er high-rank­ing tech­nol­o­gy death at JPMor­gan Chase occurred on May 7, 2014 when Thomas James Schenkman, age 42, died sud­den­ly in Con­necti­cut. Schenkman held the high rank of Man­ag­ing Direc­tor of Glob­al Infra­struc­ture Engi­neer­ing for JPMor­gan Chase. He had begun his tech­nol­o­gy career with Microsoft, where he worked for 11 years. Schenkman then moved on to Gold­man Sachs in 2000 and worked there for six years. In 2006, Schenkman moved to Bear Stearns and was there at the time of its col­lapse in March 2008. Schenkman had been with JPMor­gan from that point on.

    Accord­ing to the Office of the Chief Med­ical Exam­in­er in Con­necti­cut, which only gets involved in an inves­ti­ga­tion if the death is “sud­den, unex­pect­ed, or vio­lent,” the ini­tial cause of Schenkman’s death was list­ed as “pend­ing.” It was even­tu­al­ly updat­ed to read: “ath­er­o­scle­rot­ic coro­nary artery dis­ease.”
    ...

    So it looks like we can add Dou­glas Caruc­ci to the list of mys­te­ri­ous high lev­el JP Mor­gan tech­nol­o­gy exec­u­tives. And keep in mind that the 2014 deaths all hap­pened with­in a few months of each oth­er. So we’ll see if this is an iso­lat­ed event or the the start of anoth­er clus­ter of deaths like we saw in 2014. ‘Tis the sea­son for mys­te­ri­ous banker deaths? Maybe. But if you’re a JP Mor­gan IT exec­u­tive and you recent­ly learned about some sort of explo­sive IT-relat­ed cor­rup­tion, now might be a good time to update that life insur­ance pol­i­cy just to be safe.

    Posted by Pterrafractyl | April 1, 2019, 10:40 am

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