Reasons Behind Criminal Probes Facing JP Morgan

REASONS BEHIND CRIMINAL PROBES FACING JP
MORGAN
Investigating Reasons behind Criminal Probes Facing JP
Morgan
A Business Research Project
Professor: Dr. Asila Sayedi
Submitted in Fulfillment of the Requirements for
MS611
Project
By
SAKETH RAM SAMINENI
Student Id: 516180
California University of Management and Science
November 9, 2016I. Abstract
JP Morgan’s role in the financial sector of America has been
instrumental over the years. There is no financial institution in
the history of America that boasts of extensive assets just like
JP Morgan. However, the increasing criminal probes that are
currently facing JP Morgan are threatening to derail the
progress and in the process, the customers are beginning to lose
trust in JP Morgan, the purpose of this project is to explore
some of the reasons why JP Morgan is facing large criminal
probes and in the process, establish ways in which those probes
can be eliminated. This research paper recommends three
recommendations to be implemented in a systematic way for the

company to recognize the significance of maintaining the
efficiency and the integrity of the U.S government securities,
agency mortgage-backed securities, and agency debt. The three
major problems associated with JP Morgan are Explore the issue
of unclaimed property associated with JP Morgan in several
American states, the sale of mortgage-backed securities, new
business deals won. Each recommendation has got three
implementations processes to be implemented in a systematic
way and this recommendations will ensure that JP Morgan
avoids adding more criminal probes to the already existing
numerous legal claims since the recommendations will act as a
guideline for its participation and operation in the market that
fosters great accountability and in the process encourages
integrity in its operations.. Additionally, through SWOT and
PESTLE analysis, the current situation at JP Morgan is
examined and in the process recommendations are made.
Contents
2I.Abstract
5II.INTRODUCTION
5A.Background
5B.Overall Objectives
6C.Mission and Vision of JP Morgan
6D.Problem Statement
7III.Company Overview
7A.Recommendations
7B.Three Step-by-step implementation plans
8C.Projections and Benefits of the Company Based on the
Recommendations
9IV.INDUSTRY ANALYSIS
9A.Introduction
10B.SWOT ANALYSIS
10a.JP Morgan SWOT Analysis
12C.PESTLE ANALYSIS
12b.JP Morgan PESTLE Analysis
14V.LITERATURE REVIEW the paper should not have a

section called lit review.
22VI.RECOMMENDATIONS AND CONCLUSIONS
23A.Establishing an ethics and anti-corruption committee
23i.Leadership ethics
24ii.Maintenance of concrete business environment among
employees
24iii.Promoting transparency and integrity at JP Morgan
25B.Establishing of clear-cut measures of buying and selling of
mortgage-backed securities
26C.Establish measures that will keep track of the company
assets and maintain its properties
28VII.CONCLUSIONS why are these all CAPS? Major words
firt letter needs to caps only.
29References
II. INTRODUCTION
JP Morgan Chase and Company is situated in New York City. JP
Morgan has a wide reputation in the banking sector for being an
outstanding performer in the banking service provision industry.
Additionally, it aims at becoming the bank that offers the best
financial services in the world. It does this by helping their
clients to do first class business and taking a long term
approach in solving their problems. Moreover, it has a standing
vision of offering their clients with first class service for the
next 200 years. It has a history of showing leadership during
financial crisis times which helps it to continue building its
legacy in the banking industry. JP Morgan has always
contributed to business affairs as well as those concerning the
society and the world. The bank describes their actions as being
driven and influenced by the desire to do what is right for the
present and for the future as well. In 2010, JP Morgan was able
to acquire full ownership of its UK joint venture and it has
continued to grow continuously till the present day.A.
Background
The research topic of this report revolves around exploring
some of the reasons why JP Morgan may be experiencing one of

the biggest bank legal fines ever. While working as an intern at
JP Morgan, the Wall Street Journal indicated that JP Morgan
was offering approximately $ 3 billion to deal with unspecified
criminal and legal charges probes. Additionally, the numbers
are still in flux but however the bank fines it will pay, I will
still go down in history as one of the biggest criminal probes in
a banking and financial sector. In order for JP Morgan to move
forward in terms of financial performance, it needs to curb on
the numerous criminal probes it is facing.
B. Overall Objectives
This research report revolves around exploring some of the
reasons why the largest bank in terms of Assets and finance in
America is experiencing so many criminal probes. In this case,
to solve this issue, the research project will deal with the
following objectives
a. To investigate the sale of mortgage-backed securities in the
course of the run-up to the financial crisis: Besides, a civil
criminal investigation, this kind of criminal investigation is a
very rare one and can hurt JP Morgan negatively.
b. Investigation of new business deals won by JP Morgan: Anti -
bribery investigators were of the opinion that JP Morgan had
obtained the services of children of powerful Chinese
backgrounds to assist it in winning business deals. Such
allegations can hurt the financial performance of JP Morgan
negatively.
c. Explore the issue of unclaimed property associated with JP
Morgan in several American states: In this case, if the bank is
found guilty of aiding and abetting breach of fiduciary duty,
then its image and financial performance will be hurt.C.
Mission and Vision of JP Morgan

The mission Statement that acts as a guiding philosophy of JP
Morgan is to be the best financial services company in the
world”. Additionally, according to the statement on their
official website, the Visionary statement of JP Morgan states
that “At JP Morgan Chase & Co. we want to be the best
financial services in the world. Because of our great heritage
and excellent platform, we believe this is within our reach.” In
this case, it can be argued that the vision stamen communicates
effectively what the primary values, business goals, identity and
purpose of JP Morgan are.D. Problem Statement
JP Morgan Chase is universally acknowledged as a financial
holding company that offers commercial and consumer banking
services under the guidance of Chase brand. Additionally, its
consumer business revolves around small business, small credit
cards, auto-finance, commercial term lending and equipment
finance among others. However, the long strings of criminal
probes that the bank is currently facing is threatening to derail
its progress when it comes to asset management and banking
services. The three major investigations associated with JP
Morgan are Explore the issue of unclaimed property associated
with JP Morgan in several American states, the Sale of
mortgage-backed securities, new Business deals won.III.
Company Overview
JP Morgan is universally acknowledged as a financial holding
company that was incorporated in the year 1968. Additionally,
the banking finance company is involved with financial
transaction processing, investment banking, financial services,
and asset management. Its Chase activities are divided into four
business segments and other corporate segments. In this case,
the segments of the company are Corporate & Investment bank,
Consumer, and Community banking sector, Asset Management,
and Commercial banking. It is through this numerous company

segments that the JP Morgan has gone ahead to establish a name
as one of the largest asset management company in the U.S.
A. Recommendations
A. Establish clear-cut measures of buying and selling of
mortgage-backed securities: A good financial set up ensures
that the banking financial assets are managed well in the long-
run hence making criminal probes revolving around lending of
loans a rare case.
B. Establish an ethics and anti-corruption committee that will
see to it that any transactions done in the name of JP Morgan
are based on the regulations stipulated under the national anti -
corruption committee.
C. Establish measures that will keep track of all the company
properties: In so doing, the company will avoid legal claims
associated with unclaimed properties
B. Three Step-by-step implementation plans
i. Establishing of clear-cut measures of buying and selling of
mortgage-backed securities
a. Ran stress tests in all the markets that are served by JP
Morgan
b. Focus on the market disparities and fund flows
c. Assess the consequences of the Brexit vote for its operation
as well as its customers
ii. Establishing an ethics and anti-corruption committee
a. Train the top management and the individuals responsible for
brokering business deals for JP Morgan on the importance of
practicing integrity and the dangers associated with engaging in

corruption scandals.
b. Promoting transparency and liquidity in a manner that
supports the integrity of the market and financial liquidation
c. Maintaining a concrete and robust control environment while
conducting business deals associated with JP Morgan
iii. Establish measures that will keep track of the company
assets and maintain its properties
a. Manage extensive assets positions with integrity and care
b. Establish an external control environment that will ensure
that each and every company property is in accordance with
applicable regulations, laws, self-regulatory company rules and
best property management rules
c. Establishing internal property and asset monitoring policies
in an effort to further the ability of JP Morgan in identifying
specific property trends, strategies, trends or behaviors within
the property and asset management regulations that may cause
triggers for mandatory business and property compliance
review.
C. Projections and Benefits of the Company Based on the
Recommendations
The recommendations stipulated in this research recognize the
significance of maintaining the efficiency and the integrity of
the U.S government securities, agency mortgage-backed
securities, and agency debt. In other words, the
recommendations imply that all the market participants and the
public will benefit from a market place that is able to practice
high level of integrity and transparency when conducting its
business operations. In this case, this recommendations will

ensure that JP Morgan avoids adding more criminal probes to
the already existing numerous legal claims since the
recommendations will act as a guideline for its participation
and operation in the market that fosters great accountability and
in the process encourages integrity in its operations.IV.
INDUSTRY ANALYSISA. Introduction
JP Morgan Chase is universally acknowledged as a financial
holding company that offers commercial and consumer banking
services under the guidance of Chase brand. Additionally, its
consumer business revolves around small business, small credit
cards, auto-finance, commercial term lending and equipment
finance among others (Smart & Creelman, 2013). Moreover, the
company offers services in fiancé to governments, corporations,
institutional investors, and wealthy individuals under its JP
Morgan brand. Furthermore, it also deals in financial
transaction activities, private equity services, and asset
management (Anderson, 2013). In essence, the bank coupled
with its non-bank activities operate throughout the country,
through subsidiaries and overseas branches, subsidiary foreign
banks and representative offices. However, its main headquarter
offices are found in The United States in New York City
(Pultarova, 2014).
A number of challenges, one being the long strings of criminal
probes that have hampered its reputation and financial progress
has of recent faced JP Morgan. Given the fact that JP Morgan is
one of the dominant banking institutions in the history of
America, it is somewhat questionable to believe the situation
the bank has found itself. One simple reason can be the fact
that its management is not really keeping track of the activities
that is going around the operation of the banking sector.
Additionally, the criminal probes that the bank is currently
facing are one of the largest penalties that a bank has ever been
slammed with in the history. In fact, this is evidenced by the

fact that its criminal probes are supplanting HSBC’s a $ 1.2
billion penalty that was accorded to them for money laundering.
However, the problems that JP Morgan is currently facing can
be analyzed using the SWOT analysis and PESTLE analysis in
order to identify some of the areas that made the bank to incur
some challenges and how these challenges can be solved. The
SWOT analysis will be helpful in establishing the current
situation at JP Morgan whereas the PESTLE analysis will be
crucial in determining some of the environmental factors that
either are affecting the progress of JP Morgan or can help the
bank to move forward from their current situation.B. SWOT
ANALYSIS
a. JP Morgan SWOT Analysis
i. Strengths
Chase bank possesses an extensive consumer base that is one of
their greatest strengths. Additionally, JP Morgan is universally
accepted as the most prominent bank in America. Moreover, the
iterative mergers that took place to establish this extensive
banking institution imply that the accessibility and the
infrastructure of the JP Morgan as a financial institution are
huge (Duffy & O’Rourke, 2015). In simple terms, these
financial facts clearly indicate that JP Morgan is a more stable
bank as a premier banking institution that ensures that it can put
up with any fiscal shocks, challenges in the long –term and in
the short-term; this entails the many criminal probes that it is
currently facing.
ii. Weaknesses
One of the weaknesses that JP Morgan is currently facing is the
fact that it has damaged its brand name over the years. In this

case, a number of scandals have played a downside role in the
reputation of the bank. For instance, in the year 2002, JP
Morgan was fined a lump sum some $ 80 million to the U.S
government for deceiving investors through a market research
that was deemed biased (Duffy & O’Rourke, 2015). Moreover,
another example where the trust of the consumers in JP Morgan
derailed when the bank appeared to overcharge the military
personnel’s mortgages. In other words, this failure to offer
consumers the much- needed protection has been a repeated
case for quite some time now and in the process, it may erode
their long-term customer loyalty base. In the process, JP
Morgan needs to establish measures that will help it review its
policies on a more constant level by taking into consideration
the consumer feedback extensively.
iii. Opportunities
By Merging with Bank One, JP Morgan has embarked on a
number of myriad business options Duffy & O’Rourke, 2015).
Additionally, this merger can be said to have opened up new
business opportunities for JP Morgan by expanding its presence
in the Midwest since in this region, Bank One is accepted as a
market leader. By using this partnership, JP Morgan can be able
to reduce the impact of the bank probes leveraged against it.
Moreover, JP Morgan has established roots in over 60 countries
around the globe (Anderson, 2013). However, it can be argued
that the bank has an open opportunity to expand its business
operations but it is not vigorously pursuing the idea.
iv. Threats
JP Morgan is facing stiff competition from international and
local banking sectors most especially given the current criminal
probes the bank is facing and the restrained economic climates

(Kaur & Malhotra, 2016). Now, it can be argued that the bank
has tried, as much as possible to remain afloat based on the rich
vein of assets and financial probes it possesses (Anderson,
2013). In this case, JP Morgan has to establish ways that can
ensure that its criminal probes does not offer a competitive
advantage to its competitors like Citigroup (Professional
academy, 2016).C. PESTLE ANALYSIS
b. JP Morgan PESTLE Analysis
PESTLE stands for Political, economic, social, technological,
environmental and legal (Professional academy, 2016).This
analysis is mainly used to analyze the external environmental
factors.
i. Political factors
Being a multinational banking institution that operates around
the globe, JP Morgan has a number of political factors that are
affecting its overall banking performance (Duffy & O’Rourke,
2015). Additionally, being a multination asset company is much
profitable but any instability in the political factors in the
country in which they are operating may result in adverse
implications (Anderson, 2013). In this case, heavy taxations and
legal assistance because of the high criminal probes that the
Bank ids facing can result into a high and fall situation to the
banking sector (Anderson, 2013). In fact, it is because of the
heavy legal penalties and regulations that JP Morgan is
currently under criminal probes.
ii. Economic factors
JP Morgan is one of the leading financial asset management
banks in the history of America. In this case, by analyzing its
economic environment, it is clear that the current situation in

the banking industry can be effectively being determined (Duffy
& O’Rourke, 2015). In this case, Because of the inflation
situation in the U.S, most investors are of the opinion that the
unprecedented monetary and fiscal stimulus can result in the
reduction in value of the U.S Dollar and in the process, lead to
higher level so inflation. In so doing, this can make JP Morgan
to lose its potential investors in the wake of the on-going
criminal probes for fear of the company collapsing. On the
consumer level, based on the current situation, it can be said
that the consumer confidence of JP Morgan is admirably high
(Kaur & Malhotra, 2016).
iii. Social
The cultural and social influences to business operations vary
depending on the country. In this case, investing in a country
that has stable income and labor are important for the success of
JP Morgan. In this case, JP Morgan must invest in countries that
possess stable income levels, stable wages, and labor (Duffy &
O’Rourke, 2015).
iv. Technological
JP Morgan takes a multi-faced approach when it comes to
technological sustainability that makes an important component
of their operations (Duffy & O’Rourke, 2015). In this case,
most of their technological adoption is mainly driven by the
growth of their financial services coupled with regulatory
obligations. In so doing, JP Morgan has tried to influence
vendors to offer approaches and products that maintain or
reduce costs while at the same time increase product utilization
(Anderson, 2013). In fact, JP Morgan has established
engineered solutions that ensure maximization of resource
efficiency.

v. Legal
This is the most important part of the recommendation strategy
mainly because the current criminal probes that JP Morgan
result from the fact that it went against some legal frameworks
that govern the banking sector (Duffy & O’Rourke, 2015). In
other words, since JP Morgan invests heavily in cyber insurance
coupled with other legal agreements that allow the government
to take necessary controls in case of any malice activity, it is
possible for JP Morgan to undergo various criminal probes and
investigations that are allowed by the constitution and the
banking sector Regulation ACT. However, by establishing legal
agreements with the government that will see to it that the
government intervenes in case of a problem will ensure that JP
Morgan stays secure in a big way.
vi. Environment
In case of adverse climatic conditions and natural calamities
like drought, then JP Morgan will be handed with a financial
blow (Kaur & Malhotra, 2016). However, the challenges that
can be incurred because of adverse climatic conditions and
natural calamities can be dealt with through proper insurance
policies (Anderson, 2013). However, as much as these assets
can be recovered through insurance, it is acknowledged that any
calamity on a big investment bank can cause a temporary fall in
its stocks.
V. LITERATURE REVIEW
i. Criminal Probes that JP Morgan is currently Facing-Statement
of the Problem
On September 24, 2016, the Wall street journal was of the

opinion that JP Morgan was offering $ 3 billion to the
government as settlement of an unspecified number of criminal
investigations after the justice department threatened to file
probes in an investigation that accompanies its pre-crisis
mortgage (Krimsky & Simoncelli, 2013). In other words, this
figure is believed to be enormous but based on the number of
cases that the payment is meant to resolve, it would go down in
history as the highest bank-payout in the financial regulation
history. In other words, being one of the largest banks in the
American history, it is wise to argue that individuals are not
keeping track of the progress and the troubles this bank has
found itself in. Apparently, its management and financial
analysis team can be said to ignore their obligations based on
the predicaments facing the largest bank-holding asset in the
U.S. In fact, this is evidenced by the fact that its criminal
probes are supplanting HSBC’s a $ 1.2 billion penalty that was
accorded to them for money laundering (Shelley & Picarelli
2002).
ii. Some of the Outstanding Investigations of JP Morgan-
Purpose
Residential mortgage-backed securities are some of the
outstanding investigations. In this case, JP Morgan is being
investigated for allegedly misrepresenting the underlying home
loans quality in mortgage bonds that is it sold. Additionally, the
taxpayer of the United States incurred losses of approximately$
33 billion when the government bailed out the housing lenders
of Freddie Mac and Fannie Mae. Apart from the mortgage
securities probe, the Manhattan Us Attorney is establishing
whether JP Morgan employees criminally blurred an
investigation into an alleged manipulation of the electricity
market by the bank. Another pending investigation that JP
Morgan is currently facing revolves around the fact that the
company was alleged to have hired the children of Chinese

politicians who are believed to be very powerful in an act that
was considered as bribery. In fact, some people wondered
whether this was just an old-fashioned-nepotism (Shahin & El-
Achkar, 2016).
iii. Dealing with Criminal Probes
Banks face extensive operating costs and complexity that is
associated with businesses with an increasing scope of criminal
probes and growing legal frameworks and regulatory liabilities
hence highlighting the need and demand for a more unified and
integrated approach to risk compliance and mitigation.
Additionally, top financial executives areas of recent concerned
about the ever increasing sophistication of criminal probes or
rather financial crimes including terrorism financing, money
laundering, fraud, tax evasion, internal threats, and bribery. In
this case, while this is happening, the number of banks and
financial institutions facing the wrath of the legal framework
and regulatory policies in the UK, U.S, and other European
Union countries has increased tremendously in recent years. In
fact, the increasing level of territorial enforcements has
increased the challenges associated with the banking
compliance hence increasing the complexity and complexity of
business operations (Sudjianto et al., 2015).
Banks have invested heavily in compliance management and
risk management. However, their fragmented and dispersed
approach to crimes of financial nature has possessed limited
success when it comes to staving off adversaries, threats and
realizing the regulatory requirements of financial institutions.
In so doing, this has resulted in increased money spending and
violations on regulatory compliance. One sure thing is the fact
that banks need to reestablish their approach to dealing with
financial crimes while at the same time fostering regulatory

compliance. It is important for banks to establish ways in which
they can adapt to the ever-changing regulatory and criminal
landscape. To realize these objectives the banking sector must
conduct a risk assessment based on the products of the bank,
geographies, products, and services to better understand the
threat and adversaries environment. Second, the banking sector
should integrate efforts incorporated from various disciplines as
far as financial crime prevention is concerned across the
company to identify overlaps and synergies in individuals,
technologies, processes that will ensure that it reduces
redundancies and in the process , it helps in streamlining the
banking processes (Harrison & Ryder, 2016).
Moreover, the banking sector should as well improve on data
quality and availability to obtain a holistic picture of the
adversaries, entities and the reasons behind these threats. In so
doing, this will ensure that subtle and complex threats are
uncovered as well as emerging ones effectively and early
enough. Another important way of avoiding criminal probes is
by nurturing a culture that is full of integrity and high ethics by
establishing accountability standards, controls, and policies
while at the same time working day and night to increase
employee awareness and interrelating closely with employee
awareness. Furthermore, actively participating in the initiatives
postulated by the financial industry should be another policy
that must be undertaken to reduce the level of risk and improve
employee compliance (Gottschalk, 2016).
iv. The Growing Burden of Criminal Probes and Regulatory
Compliance-Implementation
It is universally acknowledged that criminals are more
sophisticated especially when its matters to do with cyber crime
and financial matters, hence so many financial sectors are trying

as much as possible to catch up with the innovative exploitation
of these risks. As of recent, exponential regulatory frameworks,
demands for compliance and transparency coupled with hefty
penalties for non-compliance have pressurized banks both on
the operational and financial level. It is acknowledged that a
number of drivers such as rising transaction volumes coupled
with technological advancements have formulated new ideas for
financial malfeasance. In essence, criminals manipulate the
financial sector of the banks by using innovative algorithms
coupled with complex schemes across sectors and channels. It is
for this reason that banks must be able to establish measures
that can guard against internal employee threats. Apparently,
these financial probes are not only affecting the big banks but
the small financial institutions are also victims of criminal
probes. Small banks are also easy targets for criminal activities,
as most of them are known to lack robust systems that can fend
off growing risks and threats (TaJPour, Ibrahim & Zamani,
2013).
v. Surging Compliance Costs and Surging Regulatory Scrutiny
Regulators across the universe are believed to have intensified
their assessment and scrutiny of heavy fines to banks that end
up disobeying or failing to adopt the appropriate banking
Secrecy Act that goes hand in hand with the Anti-Money
Laundering program. For instance, statistics indicate that
between the year 2007 and 2014, financial institutions in the
banking sector paid approximately $21 billion in cumulative
criminal probes fines in the United States alone. One notable
issue is the fact that banks around the globe are challenged
frequently with emerging AML compliance and regulatory
requirements. For instance, the long awaited mortgage loan
beneficiary ownership rule stipulated by the financial Crimes
Enforcement network that will require financial institutions
including banks to identify and acknowledge the true owner of

company’s properties and mortgage loan bearer behind the
financial transactions that take place in the bank. It is also
important for banks to comprehend and analyze the ongoing
assessment of the U.S Anti-Money laundering framework (Suja
& Raghavan, 2014).
Government criminal probes want financial institutions like
banks to be more responsible when it comes to prevention of
financial crime by reporting any suspicious financial criminal
threat. In dealing with the issues raised in this regulation, Most
banking sectors around the globe have made notable efforts to
enhance their skills and their transaction monitoring systems
that ensure that they acquire greater abilities, knowledge about
their customers coupled with the number, type and the
magnitude of transactions they make. Others have focused on
recruiting individuals that are highly skilled in a matter of risk
compliance and investigations. Another potential area of
concern is the potential shortage of trained compliance experts
that is surpassed by the increasing need and responsibilities of
compliance experts. In fact, for those small-scale banking and
financial sectors, the issue of criminal problems and regulatory
compliance has become a growing issue of concern. One of the
reasons behind this increasing burden revolves around the fact
that their compliance programs are not updated (Jacob &
Antony, 2014).
vi. Challenges Faced when Fighting Criminal Probes
It is universally acknowledged that keeping up, with the ever -
increasing regulations and criminal probes ids becoming one of
the most challenging tasks for banks but the most proven
challenge is non-compliance because it is even more costly.
Some of the fines and costs encountered when a bank fails to
comply with the regulations and acts that govern the financial
integrity of the banking sector are remediation, monetary fines,

and unquantifiable implications of investor dissatisfaction
coupled with the reputational damage to the company image.
Additionally, banks have tried to invest heavily in ensuring that
they meet the regulatory requirements while at the same time
strengthening security. However, such efforts are undervalued
by their constant piecemeal approach to curbing issues of
financial integrity and other financial related crimes (Krimsky
& Simoncelli, 2013).
Without unified data from a number of channels and
geographies, it is as well harder to identify suspicious financial
activities or to get a unified view of organization-wide risk.
Enhancing the ability to detect, prevent and report financial
crime and at the same time contain escalating regulatory and
compliance costs is the biggest challenge that financial
institutions face (Quigley, 2015).
vii. Steps of Fighting Financial Crime
In reality, there does not exist a single perfect way to curb
financial crime. Financial institutions need to take a number of
steps to acquire more experience in fighting threats and
navigating the complex regulatory fields. Tailoring the
approaches aimed at managing financial crime risks acts as the
first step towards fighting financial crime. Development and
application of effective controls have become knowledgeable
about the potential risks and the areas that they impact most. On
identification, a risk assessment should be carried out based on
the institution’s proneness to risks that could be determined by
the size, channels, customer types as well as nature of products
and services, geographical location. Mapping the acquired risk
information against the existing internal policies and control
procedures, financial institutions could then access their
efficiency in mitigating risks and make changes where they

emerge necessarily. Continuous should as well be conducted to
ensure relevance of findings (Casas-Zamora, 2013).
Addressing silos is a key aspect in fighting financial crime. A
wide spectrum of types of financial crimes exists but often goes
unnoticed because of the fact that the disciplines operate in
silos. Integrating and merging various internal functions aimed
at preventing financial crime could help to manage the growing
sophistication of the crimes. Such integration, however, could
increase the vulnerability to cyber-attacks and alternatively
improving communication and coordination among the teams is
advised. Integration of transaction monitoring in the cyber -
crime and AML disciplines could mark a starting point. Since
the teams tend to overlap in terms of their data requirements,
systems, and processes, they as well tend to face similar
challenges. If the cyber-security team issues a cyber-attack
alert, for example, the AML function is given the chance to
enhance transaction scrutiny and prevent money theft. On the
other hand, the fraud prevention team could take action to
prevent monetization of the stolen customer data while
investigating the perpetrators at the same time. Collaboration of
departments in such a way enables banks to acquire increased
efficiencies in monitoring transactions and investigation
tracking. Security gaps could as well be filled, reduce
redundancies enable streamline processes and innovate models
are capable of identifying and preventing highly sophisticated
crimes (Girod, 2014).
Data challenges are the main contribution towards ineffective
attempt to fight financial crimes. The ability to integrate efforts
lies deep in the ability of banks to acquire high-quality,
consistent and reliable information from across the
organization. To overcome data challenges, banks may need to
adjust their internal policies regarding data entries and

management. Policies should provide for standardization of
customer records, transactions as well as crimes and
unstructured data from across the bank. Standardization works a
great deal towards improving the quality, accuracy and
usefulness of available data in achieving financial crime control
(Shahin & El-Achkar, 2016).
viii. Benefits of Addressing Criminal Compliance and Dealing
with Criminal Probes
Analysis of data as well contains an important aspect in
detecting and preventing increasing threats. Acquisition of data
should not be the only data process towards decision-making.
Analyzing data before declaring its use is important to
understand risks posed by customers, transactions, and other
parties and realize complex threats that affect multiple business
lines. Transactions that may appear genuine in one channel may
turn out to be malicious when viewed from another point acr oss
the bank that therefore calls for a keen analysis of available
data to help to identify possible threats and malicious
transactions. Keen analysis may as well enable the bank to point
out inside threats and breaches that could have aided financial
crimes (Arvind, Gray & Wilson, 2016).
Addressing culture and people challenges in most times lead
banks out of financial crime. Senior management could set a
tone that drives the organization towards or against financial
crimes. Banks need to set standards of transparency and
accountability, establish policy controls to enhance compliance.
Zero tolerance towards potential threats should be shown to
help set a culture of conformity. Maximum awareness should be
created on emerging potential threats by updating employees on
emerging risks and sensitize them on various loopholes that can
be used by criminals to attack (Yeoh, 2016).

Banks need to establish collaborations with industry-wide
initiatives to achieve a consolidated approach towards curbing
financial crime. Collaboration helps to avoid duplicating efforts
across the industry, facilitate creation best practices and
standards and enhance innovation. Collaborating with the
government could help financial institutions to take financial
crime control to a more efficient level. In the UK for instance,
Joint Money Laundering Intelligence Taskforce was set up to
study scales, methods that were employed in money theft,
suggest correction measures, and to enable effective
intelligence sharing across parties (Shelley & Picarelli, 2002).
VI. RECOMMENDATIONS AND CONCLUSIONS
The long strings of criminal probes that the bank is currently
facing is threatening to derail its progress when it comes to
asset management and banking services. In other words, the
criminal probes are now making the once extensive base of
customers to lose trust in the bank and in the process, JP
Morgan risks incurring losses in the long run is this long strings
of cases is not dealt with effectively. In other words, this long
string of cases is believed to be as a result of poor management
in assets, property and financial operations. It is therefore
important for JP Morgan to establish strategies that will ensure
that issues of corruption and greed in the company are dealt
with and in the process, ensure that the company promotes
integrity and honesty among its workers .In so doing, it will
ensure that all the legal requirement s are well dealt withA.
Establishing an ethics and anti-corruption committee
Ethics are the values and principles an individual possess to
govern his decisions and activities. Additionally, in an
organization, ethical codes are a set of principles that are able
to guide the company in its policies, programs, and decisions
for the business. In other words, the ethical philosophy

employed by an organization is very crucial to the productivity,
reputation and the bottom line of the business operations
(Shahin & El-Achkar, 2016).i. Leadership ethics
Training the top management and the individuals responsible for
brokering business deals for JP Morgan on the importance of
practicing integrity and the dangers associated with engaging in
corruption will be crucial in eliminating some of the negative
implications caused by criminal probes (Ferrell & Fraedrich,
2015). The ethics that leaders in an organization employ to
control and mange employees may as well play a very crucial
role in the overall functioning of the organization since it
affects the loyalty and morale of its works (Harrison, & Ryder,
2016). Therefore it is important for JP Morgan to establish a
code of ethics that its leaders may employ in determining
acceptable behavior in the organization and discipline
procedures. In this case, education and a higher level of training
in ethical matters may assist JP Morgan to reduce the number of
criminal probes that it is currently facing (Jacob & Antony,
2014). Apparently, when leaders demonstrate exemplary ethical
behavior, it can be noted that the reputation of the company in
the financial circles and the community are enhanced. In
essence, a solid reputation for JP Morgan in the financial
market may help it to regain some of the lost customer trust and
hence reduce the level of involvement in fraud activities.
ii. Maintenance of concrete business environment among
employees
One advantage that ethical behavior does to an organization
regarding the employee’s behavior is the fact that, an ethically
sound worker always upholds integrity and completes his work
with honest. Additionally, those workers who use ethics as the
moderating factor of their behavior are acknowledged to adhere
to the company’s rules and reputations while at the same time

striving to realize the goals and objectives of the organization.
Moreover, ethical employees also meet the required work
standards in terms of quality and deadlines.
iii. Promoting transparency and integrity at JP Morgan
Leaders and workers adhering to the ethical code of conduct
while at work always establish an ethical organizational culture.
In this case, through proper training, JP Morgan management
team can establish a great atmosphere in terms of ethical culture
by acting as role models (Suja & Raghavan, 2014). In other
words, JP Morgan can as well reinforce the ethical behavior by
giving rewards to employees who are known to exhibit integrity
and values that coincide with the code of the company and
disciplining those members that disobey the company’s code of
conduct (Gottschalk, 2016). With an ethical culture in an
organization, the morale of the workers are high and in the
process, the financial performance and net revenues of JP
Morgan will improve hence reducing the chances of being
involved in illegal transactions to boost their financial
position.B. Establishing of clear-cut measures of buying and
selling of mortgage-backed securities
i. Assessing the impact of Brexit vote
The implications of Brexit vote could go either way and it is
accepted that only time will be able to give a clear picture of
what is at stake. Consequently, it can be argued that even if
Britain maintains its connection with other European countries,
the seeds of uncertainty as far as some of the global financial
institutions like JP Morgan have already been planted. In this
case, the Brexit vote is troubling and endangering the rejection
of economic integration and free trade since the survival of
Europe and other global financial institutions can only survive
if its members and workers are able to make shared sacrifices.
In this case of JP Morgan, the members must be able to do

everything within their power to stop the company from doing
something that is forbidden under the law to avoid the
consequences of criminal probes.
ii. Focus on the market disparities and fund flows
JP Morgan is committed to being one of the most respected and
influential financial institutions around the globe growing its
communities globally and serving its customers well. However,
the ongoing financial probes are trying to reduce its progress as
a financial institution. Therefore, to realize its objectives, JP
Morgan must establish strategies that enable it to deliver
superior long-term values, satisfaction, and benefits to its
shareholders (Ferrell & Fraedrich, 2015). In other words, it is
through maintaining and building a vibrant and healthy
company that they may be able to make investments in the long-
run. In other words, its activities must be unquestionably sound
in terms of legal requirements so that it may be able to avoid
the heavy penalties and fines that are slammed on organizations
when they fall on the wrong side of the law.
iii. Developing a training plan that encourages legal compliance
Before JP Morgan establishes a training program that will
ensure that its members and the organization at large complies
with the legal requirements, it is important for it to conduct a
research about the current situation that the company is going
through. In other words, most employers are of the opinion that
good training program is instrumental in the success of the
organization hence the company that can realize positive
revenues is the one that will establish a training program that is
unique and different from other competitors (Quigley, 2015). In
essence, some of the training skills that can be developed at JP
Morgan include literary, organization orientation, technical

skills and other skills in relationship to property management
and acquiring (TaJPour, Ibrahim & Zamani, 2013). In the case
of JP Morgan, training programs to prevent sexual harassment,
lawsuits and other programs designed to curb issues of audits
safety training coupled with ethical training will be very
influential in helping it to solve its challenge of criminal probes
(Jacob & Antony, 2014). Moreover, it is important for JP
Morgan to establish measures that will ensure that the person
conducting the training program as the supervisors is qualified
in matters of the law. In simple terms, mostly companies
training programs fails because the training supervisor does not
possess the necessary skills in the field required to develop the
worker's ability (Arvind, Gray & Wilson, 2016).C. Establish
measures that will keep track of the company assets and
maintain its properties
In an organization, company assets are so important to make the
company function properly. Therefore the company should take
measures and decisions to keep track and maintain its assets.
i. The use of reasonable care
The employment of reasonable care by an employer can be
established in cases where the employer of an organization
disseminates, establishes and enforces an anti-harassment policy
coupled with a clear explanation of the conduct that is
prohibited periodically to each and every worker of the
organization. In the case of JP Morgan, the top management
must establish a clearly described complaint process that will
see to it that any public complaints, government investigations,
and criminal probes that are currently on-going are clearly
accessible to ensure a forthright solution is arrived at amicably
(Yeoh, 2016).
ii. Manage extensive assets positions with integrity and care

Assets of a financial institution are one of the most crucial and
fundamental assets of the organization. In this case, In order for
JP Morgan to avoid legal probes associated with property
mortgages, it should establish clear measures in place that
ensures that the company is operating with a high level of
integrity (Shelley & Picarelli, 2002).
iii. Establish an external control environment that will ensure
that each and every company property is in accordance with
applicable regulations, laws, self-regulatory company rules and
best property management rules
External control environments will ensure that JP Morgan
keeps track of all the assets controlled by its name. In this case,
this can be achieved through establishing internal property and
asset monitoring policies in an effort to further the ability of JP
Morgan in identifying specific property trends, strategies,
trends or behaviors within the property and asset management
regulations that may cause triggers for mandatory business and
property compliance review (Sudjianto, et al, 2012).VII.
CONCLUSIONS
JP Morgan under its operational brand name Chase is one of the
largest banks in the United States. It boasts of a large customer
base since it serves individuals internationally because of its
extensive banking assets. A number of challenges, one being the
long strings of criminal probes that have hampered its
reputation and financial progress has of recent faced JP Morgan.
Given the fact that JP Morgan is one of the dominant banking
institutions in the history of America, it is somewhat
questionable to believe the situation the bank has found itself.
One simple reason can be the fact that its management is not
really keeping track of the activities that is going around the
operation of the banking sector. Therefore, in order to solve the
current problems facing JP Morgan, it should consider such

recommendations as introducing an ethics and anti-corruption
committee that will ensure that its company operations are
conducted with honesty and the needed integrity. In so doing,
some of the criminal probes facing the company will be
avoided. The recommendations stipulated in this research
recognize the significance of maintaining the efficiency and the
integrity of the U.S government securities, agency mortgage-
backed securities, and agency debt. In other words, the
recommendations imply that all the market participants and the
public will benefit from a market place that is able to practice
high level of integrity and transparency when conducting its
business operations. In this case, this recommendations will
ensure that JP Morgan avoids adding more criminal probes to
the already existing numerous legal claims since the
recommendations will act as a guideline for its participation
and operation in the market that fosters great accountability and
in the process encourages integrity in its operations. The
company should as well ensure that it gives the
recommendations enough time to produce the desired outcomes.
In this case, the best time frame should be six months and
above.If JP Morgan adopts the recommendations it is likely to
have an increase in in total efficiency by 70%. In addition to
increased efficiency, JP Morgan will experience increased client
satisfaction as well as an increase in profit levels by over 23%
to $400 billion.References
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