JPMORGAN’S FRICTION WITH WASHINGTON  | It was not long ago that JPMorgan Chase and its chief executive, Jamie Dimon, held special sway in Washington. But that status may be fading, as the bank “increasingly finds itself in the cross hairs of federal authorities,†Jessica Silver-Greenberg and Ben Protess report in DealBook.
The criminal inquiry over the big trading loss last year joins other legal tangles. “In a previously undisclosed case, prosecutors are examining whether JPMorgan failed to fully alert authorities to suspicions about Bernard L. Madoff, according to several people with direct knowledge of the matter.†In addition, “JPMorgan misstated how the bank may have harmed more than 5,000 homeowners in foreclosure, according to several people briefed on the matter. The bank’s primary regulator, the Office of the Comptroller of the Currency, is expected to collect a cash payment from the bank to remedy the flawed review of loans, these people say.â€
Those mortgage errors, while relatively minor on their own, highlight the growing friction with regulators. Eight federal agencies are investigating JPMorgan, and federal prosecutors and the Federal Bureau of Investigation are examining potential wrongdoing. In April, senior JPMorgan executives, including Mr. Dimon, are expected to meet with investigators examining the multibillion-dollar trading loss that was the focus of a recent Senate report, people briefed on the matter said.
“Jamie and other executives feel terrible that the bank’s self-inflicted mistakes have put regulators in an awkward position,†said Joe Evangelisti, a JPMorgan spokesman. “We are wholly to blame for our errors and are fully cooperating with all authorities to make things right.â€
COHEN’S BIG ART DEAL  | Steven A. Cohen has not let an insider trading investigation â€" or an elbow â€" put a stop to his art dealings. “A renowned art collector, Mr. Cohen has bought Picasso’s ‘Le Rêve’ from the casino owner Stephen A. Wynn for $155 million, according to a person with direct knowledge of the sale who was not authorized to speak publicly,†Carol Vogel and Peter Lattman report in DealBook. Mr. Cohen, who has coveted the painting for years, agreed to buy it from Mr. Wynn for $135 million in 2006, but that deal was called off after Mr. Wynn, who has an eye disease, put his elbow through it. An art restorer repaired the canvas and apparently restored the painting’s value. The art deal was reported earlier by The New York Post.
Mr. Cohen is effectively $616 million poorer after his hedge fund, SAC Capital Advisors, settled with the government over accusations of insider trading. But he has continued to add to his world-class art collection, which includes works by Jackson Pollock, Monet and Manet. The purchase of “Le Rêve†is at least the second $100 million-plus acquisition of art by Mr. Cohen in the last two years.
BRITISH BANKS’ CAPITAL HOLE  | British banks need to raise a combined £25 billion ($38 billion) in new capital by the end of the year to protect against future shocks, local authorities said on Wednesday. “The Bank of England, which takes over the direct supervision of British firms like HSBC and Barclays next week, said the new reserves were needed to protect against losses connected to risky loan portfolios, future regulatory fines and the rejiggering of banks’ bloated balance sheets,†DealBook’s Mark Scott writes.
For most American banks, the Federal Reserve’s stress tests showed they had sufficient capital to withstand a major downturn. “British banks are not so lucky,†Mr. Scott says.
ON THE AGENDA  | Pinnacle Foods, owned by the Blackstone Group, is expected to price its I.P.O. Wednesday evening. Data on pending home sales for February is out at 10 a.m. Robert Benmosche, A.I.G.’s chief executive, is on CNBC at 8 a.m. A bankruptcy judge is set to rule on final approval of the merger of American Airlines and US Airways.
FORECASTS DARKEN FOR CYPRUS  | The plan to rescue Cyprus is being complicated by a gloomy economic forecast. “Instead of the relatively modest decline of 3 percent that is built into the forecast that underpins the country’s international bailout package, many economists say that estimate will need to be revised sharply downward given the shock that the island’s small economy has endured from the extended closure of its banks,†The New York Times’s Landon Thomas Jr. writes.
Paul Krugman, the economist and columnist for The New York Times, says, “Cyprus should leave the euro. Now.†He continues: “The reason is straightforward: staying in the euro means an incredibly severe depression, which will last for many years while Cyprus tries to build a new export sector. Leaving the euro, and letting the new currency fall sharply, would greatly accelerate that rebuilding.â€
Credit Suisse to Buy Morgan Stanley’s European Wealth Unit  | Credit Suisse is buying Morgan Stanley’s wealth management arm in Europe, the Middle East and Africa, which has assets under management of $13 billion, Reuters reports.
REUTERS
CBS Agrees to Buy 50% of Former TV Guide Network  | CBS is buying a half-interest in TVGN, formerly the TV Guide Network, “fulfilling a longstanding goal of adding a general entertainment basic cable network to the company’s media portfolio,†The New York Times writes.
NEW YORK TIMES
Spain Plans to Reduce Stake in EADS Â |Â
REUTERS
The Dell Deal Scorecard  | Need help remembering who’s offering what for Dell Here’s a guide to the proposed takeovers that Michael S. Dell and Silver Lake, Blackstone and Carl C. Icahn have each outlined for the computer company.
DealBook »
Controversial Media Deal in Taiwan Nears Collapse  | The pro-Beijing businessmen seeking to buy two liberal publications in Taiwan were unlikely to meet a deadline on Wednesday to complete the sale, a spokesman said.
DealBook »
I.C.B.C. Profit Beats Expectations  | Industrial and Commercial Bank of China said profit rose 19 percent in the fourth quarter.
BLOOMBERG NEWS
Goldman Amends Warrants Deal With Buffett  | The modified agreement essentially makes the billionaire one of the Wall Street firm’s biggest investors without having to pay additional money.
DealBook »
Buffett and Goldman Scratch Each Other’s Backs  | By not tying up cash in Goldman Sachs, Warren E. Buffett can keep it in reserve for another Heinz-like elephantine acquisition target, Antony Currie of Reuters Breakingviews writes.
REUTERS BREAKINGVIEWS
U.S. Firms Look to Buy Australian Software Maker  | A group that includes the private equity firms TA Associates and Updata Partners values its target, the Nintex Group, at $222 million, The Wall Street Journal reports.
WALL STREET JOURNAL
China Pushes for Tighter Restrictions on Private Equity  |Â
WALL STREET JOURNAL
Shareholder Advisory Firm Backs Agrium in Fight With Activist  | The fertilizer maker Agrium received support from Glass Lewis, a shareholder advisory firm, in a proxy struggle with the investor Jana Partners, which has a 7.5 percent stake.
REUTERS
Judge Rejects Man’s Claim of Facebook Ownership  | A judge said the claim by Paul Ceglia that he owns a portion of Facebook was based on a fraudulent contract and should be thrown out, Bloomberg News reports.
BLOOMBERG NEWS
Yahoo’s ‘Acqui-Hiring’ and Its Tax Implications  | Yahoo’s acquisition of Summly could have certain tax benefits for its founder, Victor Fleischer writes in the Standard Deduction column.
DealBook »
Morin, C.E.O. of Path, on His Mobile Routine  | “I have two iPhones, one for day and one for the night. When the day phone runs out, the night phone takes over. I never have to worry,†Dave Morin told Vanity Fair.
VANITY FAIR
A New Ring of Suspicious Traders  | Bloomberg News reports: “A former Foundry Networks Inc. executive was charged in what prosecutors called a $27 million insider-trading scheme with tipping a California hedge fund analyst about the company’s acquisition by Brocade Communications Systems Inc.â€
BLOOMBERG NEWS
Europe Expands Investigation Into Derivatives Market  | The inquiry, which has already ensnared Barclays, JPMorgan Chase and Deutsche Bank, has been broadened to include the International Swaps and Derivatives Association, a trade organization for market participants.
DealBook »
DLA Piper Calls E-Mails Cited in Lawsuit an ‘Offensive’ Attempt at Humor  | In the wake of a lawsuit of involving the billing practices of DLA Piper, the law firm issued a memo to its lawyers on Tuesday, calling language in e-mails written by its lawyers “unprofessional†and explaining its position in a case.
DealBook »
Deal Professor »
Force-Placed Insurance Is Scrutinized  | Regulators have proposed a new rule to address abuses stemming from force-placed insurance, the practice of a mortgage lender purchasing a property insurance policy for a homeowner.
NEW YORK TIMES
U.S. Seeks Tax Data From Liechtenstein  |Â
REUTERS
Federal Reserve Faults Citigroup Over Money Laundering Controls  | The Federal Reserve took aim at Citigroup and the American branch of its Mexican subsidiary over failure to monitor cash transactions for potentially suspicious activity.
DealBook »
Argentina Denied Request for Full-Court Hearing on Debt  | Argentina has lost an effort to have a full federal appeals court rehear a ruling that would prohibit the nation from treating holders of its restructured debt more favorably than other debt holders, Bloomberg News reports.
BLOOMBERG NEWS
