JPMorgan to pay $920 million fine
WASHINGTON (AP) — JPMorgan Chase & Co. will pay $920 million and has admitted that it failed to oversee trading that led to a $6 billion loss and renewed worries about serious risk-taking by major banks.
U.S. and U.K. regulators said Thursday that the largest U.S. bank’s weak oversight allowed traders in its London office to assign inflated values to transactions and cover up huge losses as they ballooned. Two of the traders are facing criminal charges of falsifying records to hide the losses.
The combined amount JPMorgan is paying three U.S. regulators and the U.K. Financial Conduct Authority adds up to one of the largest fines ever levied against a financial institution.
The Securities and Exchange Commission fined the bank $200 million and required a rare admission of wrongdoing. The Federal Reserve Board imposed a $200 million penalty, while the Office of the Comptroller of the Currency set a $300 million fine. The British regulator fined the company $220 million.
The U.S. Justice Department is still investigating the bank for possible criminal violations.
The SEC said that the breakdown in supervision stretched beyond the trading operations to the bank’s top executives.
“JPMorgan’s senior management broke a cardinal rule of corporate governance: inform your board of directors of matters that call into question the truth of what the company is disclosing to investors,” said George Canellos, co-director of the SEC’s enforcement division.
JPMorgan called the settlements “a major step” in its efforts to put its legal problems behind it.
Flood evacuees fetch belongings
LYONS, Colo. (AP) — The number of missing in Colorado’s flooding dropped dramatically to 200 as authorities reached more victims, and residents evacuated from the hard-hit canyon town of Lyons were allowed past several National Guard roadblocks Thursday to salvage what they could from their homes.
“We’re a little anxious. We’ve never gone through something like this before,” Gloria Simpson said as she waited in a long line of cars to Lyons, a community of about 1,600 in the Rocky Mountain foothills. The raging St. Vrain River destroyed dozens of homes, a trailer park, two town bridges and sections of the only road into and out of town Sept. 9.
Under tight security, Lyons evacuees were given two hours to check on their homes and leave. They had to clear several roadblocks, and Boulder County sheriff’s deputies checked their IDs — concerned that overcrowding would interfere with crews using heavy machinery to clear storm debris and restore electricity, water and sewer systems.
Bob Ruthrauff, 84, found his home intact but was repelled by the smell of rotting food when he opened his door. He spent his two hours in town getting rid of the spoilage but was grateful. “We’re very lucky. We came home to a dry home,” Ruthrauff said.
Nearby, people picked through damaged homes; a white pickup, a lawn tractor and telephone poles sat in the river Across the Front Range, the number of people unaccounted for plunged from a high of 1,200 to about 200 thanks to rescues and the restoration of phone service in more areas that allowed residents to contact family and authorities.
Obese patients are shorted chemo
Obese people are less likely to survive cancer, and one reason may be a surprising inequality: The overweight are undertreated.
Doctors often short them on chemotherapy by not basing the dose on size, as they should. They use ideal weight or cap the dose out of fear about how much treatment an obese patient can bear. Yet research shows that bigger people handle chemo better than smaller people do.
Even a little less chemo can mean worse odds of survival, and studies suggest that as many as 40 percent of obese cancer patients have been getting less than 85 percent of the right dose for their size.
Now, the largest organization of doctors who treat cancer, the American Society of Clinical Oncology, aims to change that. The group has adopted guidelines urging full, weight-based doses for the obese. Don’t call it supersizing; it’s right-sizing cancer care, said Dr. Gary Lyman, a Duke University oncologist who led the panel that wrote the advice.
“There’s little doubt that some degree of undertreatment is contributing to the higher mortality and recurrence rates in obese patients,” he said.
The Food and Drug Administration’s cancer drug chief, Dr. Richard Pazdur, agrees.
“By minimizing the dose, or capping the dose, we have been undertreating patients,” he said.
The dosing issue applies to all types of cancer treated with chemo — breast, colon, lung, ovarian and even blood diseases such as leukemia. It affects a lot of people. Big isn’t healthy but it’s the new “normal” — 60 percent of Americans are overweight and more than one-third of them are obese.
Giving too little chemo “could make it as if they didn’t even get treated at all,” said Dr. Jennifer Griggs, a University of Michigan breast cancer specialist.
Industry sounds alarm on piracy
WASHINGTON (AP) — The music and movie industries are sounding the alarm again on online piracy, saying illegal downloads are on the rise and search engines like Google aren’t doing enough to stop them.
Entertainment executives say they have no intention of trying to revive failed legislation that would have imposed unprecedented regulations on Internet companies.
That proposal last year prompted a fierce backlash from tech companies and activists who said it would damage the Internet as a free and open enterprise.
But the industry’s top lobbyists returned to Capitol Hill this week to try to renew interest in online piracy, which has largely fallen off the public’s radar. They are distributing to sympathetic lawmakers their own research on what they say are the growing perils of piracy and telling Congress that Google and other search engines aren’t doing enough to redirect consumers away from known pirating sites.
The suggestion was that private talks between entertainment executives and Google on anti-piracy efforts had failed to produce a solution, prompting two lobbying giants — the Motion Picture Association of America and the Recording Industry Association of America — to make their case instead in news conferences and hearing rooms on Capitol Hill on Wednesday, while Google declined to comment.
“We invite Google and the other major search engines to sit down with us to formulate a plan that goes beyond promises of action and actually serves its intended purpose of deterring piracy and giving the legitimate marketplace an environment to thrive,” RIAA Chairman Cary Sherman told a House panel on Wednesday.
Earlier that day, MPAA Chairman Christopher Dodd, a former U.S. senator, joined several House lawmakers in telling reporters that “as the Internet’s gatekeepers, search engines share a responsibility to play a constructive role in not directing audiences to illegitimate content.”
While Google declined to discuss the allegations, a spokeswoman pointed reporters to its own recent piracy assessment. In that report, Google claims consumers are more likely to find pirated material from friends or social networks than by using its search engines.
“Google search is not how music, movie and TV fans intent on pirating media find pirate sites,” Google wrote in a report titled “How Google Fights Piracy.”
The precise amount and damage done by pirated content has long been a source of debate among Internet activists, who don’t want any government regulation, and entertainment executives, who say rampant piracy hurts the U.S. economy. Independent research on the issue has been scarce. A 2010 study by the Government Accountability Office concluded it was “difficult, if not impossible” to determine exactly how much U.S. companies were losing to counterfeited goods and piracy in general.
Since last year’s hotly contested anti-piracy legislation, which awakened a grass-roots lobbying movement of Internet activists, lawmakers have had little appetite to revisit the issue. And industry has said it has abandoned legislative reforms in lieu of voluntary measures, such as ad networks advising members not to advertise on sites known to offer illegal content. Payment processors like Visa, MasterCard and PayPal also have agreed not to do business with sites that continue to pirate copyrighted material.
And, last August, Google announced it would tweak its search engine to lower the visibility of any site that acquires a high number of copyright removal notices.
But the music and movie lobbyists said this week that by their account, the change hasn’t worked. MPAA’s eight-month study, conducted through online surveys by the Boston-based consulting firm Compete for an undisclosed amount, found that 20 percent of visits to sites with illegal content were “influenced” by a search query.
NBCUniversal, which is owned by Comcast Corp., commissioned a similar study, also released this week. That study, done by a London-based digital brand monitoring company called NetNames, found that illegal content available on the Internet jumped some 159 percent between 2010 and 2012.
David Price, the chief researcher on the study, said his analysts came to that conclusion by reviewing the top 12,500 files out of 3.5 million on a public BitTorrent network — it enables people to swap large files — to determine how much of it was legal. After omitting pornographic files, the group determined that 99.97 of files shared using the popular peer-to-peer protocol were illegal.
Not everyone is swayed.
Matthew Schruers, a copyright law expert with the Computer Communications and Industry Association, which opposed last year’s industry-backed piracy bill, said the 12,500-sample size used in the NBCUniversal study would be too small to determine an accurate percentage of infringing content. He also questioned MPAA’s definition of what it means to be “influenced” by a search engine.
“Nobody is saying infringement isn’t a problem,” Schruers said. “The question is what to do about it. … Bad numbers lead to bad policy.”
Rep. Adam Schiff, co-chair of an anti-piracy caucus, said he remains sympathetic to the plight of industries reliant on copyright. But he is hoping that the two sides can work out their disagreements on their own.
“I’m a big fan of voluntary agreements,” said Schiff, D-Calif. “I’ve seen what happens with legislation.”