As Bank Deaths Continue to Shock, Documents Reveal JPMorgan Has Been Patenting Death Derivatives

By Pam Martens and Russ Martens: February 17, 2014
The probability of two vibrant young men in their 30s who are employed by the same global bank but separated by an ocean dying within six days of each other is remote. And few companies are in as good a position to understand just how remote as is JPMorgan: since 2010, it has received four patents on quantifying longevity risks and structuring wagers via death derivatives.
The two deaths at JPMorgan remain unexplained. Gabriel Magee, a 39-year old technology Vice President was found dead on the 9^th level rooftop of JPMorgan’s European headquarters at 25 Bank Street in the Canary Wharf section of London on January 28 of this year. A London coroner’s inquest is scheduled for May 15 to determine the cause of death. Six days later, Ryan Crane, a 37-year old Executive Director involved in trading at JPMorgan’s New York office was found dead at his Stamford, Connecticut home. Wall Street On Parade spoke with the Chief Medical Examiner’s office in Connecticut and was told the cause of death is “pending,” with final results expected in a few weeks.
Magee’s death was originally reported by London newspapers as a jump from the 33^rd level rooftop of JPMorgan’s building with the strong implication that eyewitnesses had observed the jump. The London Evening Standard tweeted: “Bankers watch JP Morgan IT exec fall to his death from roof of London HQ,” which then linked to their article which said in its opening sentence that “A man plunged to his death from a Canary Wharf tower in front of thousands of horrified commuters today.”
When Wall Street On Parade contacted the Metropolitan Police in London a few days later, there was no assurance that even one eyewitness was on record as having seen Magee jump from the building.
Crane’s death is equally problematic. The death occurred on February 3 but the first major media to report it was Bloomberg News on February 13, ten days after the fact, and making no mention of Magee’s unexplained death just six days prior.
According to information available at the U.S. Patent and Trademark Office, JPMorgan created the LifeMetrics Index in March 2007 as an “international index designed to benchmark and trade longevity risk.” The index was said to enable pension plans to hedge the risk of payments to retirees and incorporated “historical and current statistics on mortality rates and life expectancy, across genders, ages, and nationalities.” From 2010 through 2013, JPMorgan has received patent approval on four longevity related patents.
Reuters reported on August 26, 2013 that the long-term longevity bets taken on by the big banks have now started to cause pain as international capital rules known as Basel III require more capital to be set aside for longer-dated positions. The article noted that “JPMorgan likely has the biggest holdings of long-dated swaps because it is the biggest swaps trader on Wall Street, responsible for about 30 percent of the market by some measures, traders at rival firms said.”
One extremely long longevity bet taken on by JPMorgan was reported by Insurance Risk on October 1, 2008. According to the publication, JPMorgan entered into a 40-year £500 million notional longevity swap with Canada Life whereby Canada Life would make a fixed annual payment in return for a floating liability-matching payment that would increase if the annuitants lived longer than expected. JPMorgan was believed to have passed on some of the risk to hedge fund investors but retained the counterparty risk. Because many of these deals are private, the full extent of JPMorgan’s exposure in this area is not known.
Wall Street veterans have also commented on the fact that JPMorgan may actually stand to profit from the early deaths of the two young men in their 30s. As we reported in March of last year, when the U.S. Senate’s Permanent Subcommittee on Investigations released its report on JPMorgan’s high risk bets known as the London Whale debacle, its Exhibit 81 showed that JPMorgan’s Chief Investment Office was also overseeing Bank Owned Life Insurance (BOLI) and Corporate Owned Life Insurance (COLI) plans which allow the corporation to reap huge tax benefits by taking out life insurance policies on workers – even low wage workers – and naming the corporation the beneficiary of the death benefit. Both the buildup in the policy and the benefit at death are received tax free to the corporation.
According to the exhibit, the Chief Investment Office was tasked with “Maximization of tax-advantaged investments of life insurance premiums” for the BOLI/COLI plans. According to a report in the Wall Street Journal in 2009, JPMorgan had $12 billion in BOLI, noting that a JPMorgan spokesperson had confirmed the figure. Other insurance industry experts put the total for both BOLI and COLI at JPMorgan significantly higher.
In September of last year, Risk Magazine reported that the Basel Committee on Banking Supervision, the International Organization of Securities Commissions and the International Association of Insurance Supervisors had published a report in August warning regulators that longevity swaps may expose banks to longevity tail risk – meaning, for example, that actual death rates in a given portfolio may vary dramatically from a large population index.
One advisor is quoted as follows in the article: “You can see from the position paper that this market has a lot of characteristics that regulators don’t like in terms of banks getting involved in it. It’s based on long-dated risks, upfront payments and a serious element of hubris in assuming that the banks can model these risks better than the people who originated them. It’s potentially a market big enough to cause serious problems if it caught on and went wrong.”
That things are starting to go seriously wrong was evident in a Bloomberg News report that emerged last Friday. AIG reported that it was taking a $971 million impairment charge before taxes for 2013 on its holdings of life settlement contracts because people were living longer than expected. AIG is the company that was bailed out by the U.S. taxpayer to the tune of $182 billion during the financial crisis because of bets gone wrong.  ~

JPMorgan Vice President’s Death in London Shines a Light on the Bank’s Close Ties to the CIA

By Pam Martens and Russ Martens: February 12, 2014
The nonstop crime news swirling around JPMorgan Chase for a solid 18 months has started to feel a little spooky – they do lots of crime but never any time; and with each closed case, a trail of unanswered questions remains in the public’s mind.
Just last month, JPMorgan Chase acknowledged that it facilitated the largest Ponzi scheme in history, looking the other way as Bernie Madoff brazenly turned his business bank account at JPMorgan Chase into an unprecedented money laundering operation that would have set off bells, whistles and sirens at any other bank.
The U.S. Justice Department allowed JPMorgan to pay $1.7 billion and sign a deferred prosecution agreement, meaning no one goes to jail at JPMorgan — again. The largest question that no one can or will answer is how the compliance, legal and anti-money laundering personnel at JPMorgan ignored for years hundreds of transfers and billions of dollars in round trip maneuvers between Madoff and the account of Norman Levy. Even one such maneuver should set off an investigation. (Levy is now deceased and the Trustee for Madoff’s victims has settled with his estate.)
Then there was the report done by the U.S. Senate’s Permanent Subcommittee on Investigations of the London Whale episode which left the public in the dark about just what JPMorgan was doing with stock trading in its Chief Investment Office in London, redacting all information in the 300-page report that related to that topic.
Wall Street On Parade has been filing Freedom of Information Act (FOIA) requests with the Federal government in these matters, and despite the pledge from our President to set a new era of transparency, thus far we have had few answers coming our way.
One reason that JPMorgan may have such a spooky feel is that it has aligned itself in no small way with real-life spooks, the CIA kind.
Just when the public was numbing itself to the endless stream of financial malfeasance which cost JPMorgan over $30 billion in fines and settlements in just the past 13 months, we learned on January 28 of this year that a happy, healthy 39-year old technology Vice President, Gabriel Magee, was found dead on a 9^th level rooftop of the bank’s 33-story European headquarters building in the Canary Wharf section of London.
The way the news of this tragic and sudden death was stage-managed by highly skilled but invisible hands, turning a demonstrably suspicious incident into a cut-and-dried suicide leap from the rooftop (devoid of eyewitnesses or  motivation) had all the hallmarks of a sophisticated covert operation or coverup.
The London Evening Standard newspaper reported the same day that “A man plunged to his death from a Canary Wharf tower in front of thousands of horrified commuters today.” Who gave that completely fabricated story to the press? Commuters on the street had no view of the body because it was 9 floors up on a rooftop – a rooftop that is accessible from a stairwell inside the building, not just via a fall from the roof. Adding to the suspicions, Magee had emailed his girlfriend the evening before telling her he was finishing up and would be home shortly.
If JPMorgan’s CEO, Jamie Dimon, needed a little crisis management help from operatives, he has no shortage of people to call upon. Thomas Higgins was, until a few months ago, a Managing Director and Global Head of Operational Control for JPMorgan. (A BusinessWeek profile shows Higgins still employed at JPMorgan while the New York Post reported that he left late last year.) What is not in question is that Higgins was previously the Senior Officer and Station Chief in the CIA’s National Clandestine Service, a component of which is the National Resources Division. (Higgins’ bio is printed in past brochures of the CIA Officers Memorial Foundation, where Higgins is listed with his JPMorgan job title, former CIA job title, and as a member of the Foundation’s Board of Directors for 2013.)
According to Jeff Stein, writing in Newsweek on November 14, the National Resources Division (NR) is the “biggest little CIA shop you’ve never heard of.” One good reason you’ve never heard of it until now is that the New York Times was asked not to name it in 2001. James Risen writes in a New York Times piece: [the CIA’s] “New York station was behind the false front of another federal organization, which intelligence officials requested that The Times not identify. The station was, among other things, a base of operations to spy on and recruit foreign diplomats stationed at the United Nations, while debriefing selected American business executives and others willing to talk to the C.I.A. after returning from overseas.”
Stein gets much of that out in the open in his piece for Newsweek, citing sources who say that “its intimate relations with top U.S. corporate executives willing to have their companies fronting for the CIA invites trouble at home and abroad.” Stein goes on to say that NR operatives “cultivate their own sources on Wall Street, especially looking for help keeping track of foreign money sloshing around in the global financial system, while recruiting companies to provide cover for CIA operations abroad. And once they’ve seen how the other 1 percent lives, CIA operatives, some say, are tempted to go over to the other side.”
We now know that it was not only the Securities and Exchange Commission, the U.S. Treasury Department’s FinCEN, and bank examiners from the Comptroller of the Currency who missed the Madoff fraud, it was top snoops at the CIA in the very city where Madoff was headquartered.
Stein gives us even less reason to feel confident about this situation, writing that the NR “knows some titans of finance are not above being romanced. Most love hanging out with the agency’s top spies — James Bond and all that — and being solicited for their views on everything from the street’s latest tricks to their meetings with, say, China’s finance minister. JPMorgan Chase’s Jamie Dimon and Goldman Sach’s Lloyd Blankfein, one former CIA executive recalls, loved to get visitors from Langley. And the CIA loves them back, not just for their patriotic cooperation with the spy agency, sources say, but for the influence they have on Capitol Hill, where the intelligence budgets are hashed out.”
Higgins is not the only former CIA operative to work at JPMorgan. According to a LinkedIn profile, Bud Cato, a Regional Security Manager for JPMorgan Chase, worked for the CIA in foreign clandestine operations from 1982 to 1995; then went to work for The Coca-Cola Company until 2001; then back to the CIA as an Operations Officer in Afghanistan, Iraq and other Middle East countries until he joined JPMorgan in 2011.
In addition to Higgins and Cato, JPMorgan has a large roster of former Secret Service, former FBI and former law enforcement personnel employed in security jobs. And, as we have reported repeatedly, it still shares a space with the NYPD in a massive surveillance operation in lower Manhattan which has been dubbed the Lower Manhattan Security Coordination Center.
JPMorgan and Jamie Dimon have received a great deal of press attention for the whopping $4.6 million that JPMorgan donated to the New York City Police Foundation. Leonard Levitt, of NYPD Confidential, wrote in 2011 that New York City Police Commissioner Ray Kelly “has amended his financial disclosure forms after this column revealed last October that the Police Foundation had paid his dues and meals at the Harvard Club for the past eight years. Kelly now acknowledges he spent $30,000 at the Harvard Club between 2006 and 2009, according to the Daily News.”
JPMorgan is also listed as one of the largest donors to a nonprofit Foundation that provides college tuition assistance to the children of fallen CIA operatives, the CIA Officers Memorial Foundation. The Foundation also notes in a November 2013 publication, the Compass, that it has enjoyed the fundraising support of Maurice (Hank) Greenberg. According to the publication, Greenberg “sponsored a fundraiser on our behalf. His guest list included the who’s who of the financial services industry in New York, and they gave generously.”
Hank Greenberg is the former Chairman and CEO of AIG which collapsed into the arms of the U.S. taxpayer, requiring a $182 billion bailout. In 2006, AIG paid $1.64 billion to settle federal and state probes into fraudulent activities. In 2010, the company settled a shareholders’ lawsuit for $725 million that accused it of accounting fraud and stock price manipulation. In 2009, Greenberg settled SEC fraud charges against him related to AIG for $15 million.
Before the death of Gabriel Magee, the public had lost trust in the Justice Department and Wall Street regulators to bring these financial firms to justice for an unending spree of fleecing the public. Now there is a young man’s unexplained death at JPMorgan. This is no longer about money. This is about a heartbroken family that will never be the same again; who can never find peace or closure until credible and documented facts are put before them by independent, credible law enforcement.
The London Coroner’s office will hold a formal inquest into the death of Gabriel Magee on May 15. Wall Street On Parade has asked that the inquest be available on a live webcast as well as an archived webcast so that the American public can observe for itself if this matter has been given the kind of serious investigation it deserves. We ask other media outlets who were initially misled about the facts in this case to do the same.