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Is JP Morgan Chase guilty of Antitrust Violation?

|Includes:JPMorgan Chase & Co. (JPM), WAMQ

In a written statement by Kerry Killinger that has been submitted to the Permanent Subcommittee of Investigations (NYSEARCA:PSI), Mr. Killinger states that "Washington Mutual executives expected a $10 billion offer from Banco Santander" for 80% of the company.   That comment is significant to the attempts of WaMu to raise capital and/or sell itself by the FDIC imposed deadline of “End of September, 2008.”  However the statement hints at antitrust violation when taken in context and paired with documents from WMI’s bankruptcy case.

In the first wave of 2004 Discovery, an email, released by JP Morgan and written by Jose Cerezo, a banker at JPMorgan portrays JP Morgan CEO Jamie Dimon and Banco Santander’s CEO Emilio Botin discussing WaMU and future bidding/acquisition options.  Quoted from the email written by Cerezo, “It is important to have an open dialogue with them, as Santander would not pursue any of these opportunities if JPMorgan were to do the same (can't compete on price with JPMorgan for an acquisition in the USA). But Santander would probably hire JPMorgan as advisor if we are not going after them..."  The email also indicates that Dimon hints Washington Mutual may have worse numbers that being presented in public.

Antitrust laws are meant to protect competition in the marketplace and the mere communication with anyone at Banco Santander about the status of Washington Mutual is wrought with peril, ill-advised and most likely against the law.  In addition, JP Morgan Chase had a standing and in effect Confidentiality agreement with Washington Mutual that prevented misappropriation of confidential information and trade secrets.  At a minimum it is obvious that JP Morgan Chase broke that confidentiality agreement and worse, it appears that JP Morgan Chase may be guilty of Antitrust Violations.

Stocks: JPM, WAMQ