Pam Martens: JPMorgan rushed to hire trader who advertised market-rigging ability

Section:

By Pam Martens
Wall Street on Parade
Wednesday, December 3, 2014

On April 29, 2010, at 7:47 in the evening, Francis Dunleavy, the head of Principal Investing within the JPMorgan Commodities Group, fired off a terse email to a colleague, Rob Cauthen. The email read: "Please get him in ASAP."

The man Dunleavy wanted to be interviewed "ASAP" was John Howard Bartholomew, a young man who had just obtained his law degree from George Washington University two years prior. But it wasn't his law degree that Bartholomew decided to feature at the very top of the resume he sent to JPMorgan; it was that while working at Southern California Edison in Power Procurement, he had "identified a flaw in the market mechanism Bid Cost Recovery that is causing the CAISO" -- the California grid operator -- "to misallocate millions of dollars." Bartholomew goes on to brag in his resume that he had "showed how units in reliability areas can increase profits by 400 percent."

The internal emails at JPMorgan and Bartholomew's resume are now marked as Exhibit 76 in a two-year investigation conducted by the U.S. Senate's Permanent Subcommittee on Investigations into Wall Street's vast ownership of physical commodities and rigging of commodity markets. Senator Carl Levin, the Chair of the Subcommittee, had this to say about the resume at a hearing conducted on November 21:

"There's two things that I find incredible about this. First, that anyone would advertise in a resume that they know about a flaw in the system -- signaling that they're ready and willing to exploit that flaw. And second, that somebody would hire the person sending that signal."

JPMorgan not only hired Bartholomew, according to the Senate's findings, but within three months from the date of the email to Dunleavy, "Bartholomew began to develop manipulative bidding strategies focused on CAISO's make-whole mechanism, called Bid Cost Recovery or BCR payments." By early September the strategy to game the system was put into play. By October the JPMorgan unit was estimating that the strategy "could produce profits of between $1.5 and $2 billion through 2018." ...

For the remainder of the report:

http://wallstreetonparade.com/2014/12/jpmorgan-rushed-to-hire-trader-who...



ADVERTISEMENT

Anglo Far-East: Think Outside the Bank

Anglo Far-East is a global market leader and innovator that for more than two decades has provided private purchase, vaulting, security logistics, transport, and liquidation of allocated gold and silver bullion outside of the banking system. AFE clients include individuals, family offices, and institutions like banks and regulated funds.

Here's what one of our generationally wealthy clients has to say about AFE:

http://www.afeallocatedcustody.com/research/teleconferences/download-inf...

To get started, please visit:

https://secure.anglofareast.com/

Anglo Far-East: Think Outside the Bank



Join GATA here:

Mines and Money London
Business Design Centre
London, England, U.K.
Monday-Friday, December 1-5, 2014

http://www.minesandmoney.com/london/

Vancouver Resource Investment Conference
Vancouver Convention Centre West
1055 Canada Place, Vancouver, British Columbia, Cananda
Sunday-Monday, January 18-19,2015

http://cambridgehouse.com/event/33/vancouver-resource-investment-confere...

* * *

Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference:

https://jeffersoncompanies.com/landing/2014-av-powell

Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16