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J.P.Morgan Chase & Co. JPMorgan Chase Logo
Type Public (NYSE: JPM)
Headquarters Flag of the United States New York City, USA
Area served Worldwide
Key people James L. Dimon
(Chairman, President and CEO)
Michael J. Cavanagh, CFO
Industry Finance and insurance
Products Financial services
Revenue ▲ US$116.35 billion (2007)
Operating income ▲ US$46.13 billion (2007)
Net income ▲ US$15.36 billion (2007)
Total assets ▲ US$2.30 trillion (Jan '09)
Total equity ▲ US$123.22 billion ('07) 
Employees 228,452 (2008)
JPMorgan Chase & Co. (NYSE: JPM) is one of the oldest financial services firms in the world. It is a leader in financial services with assets of $2.3 trillion., and the largest market capitalization and deposit base of any U.S. banking institution. The hedge fund unit of JPMorgan Chase is the largest hedge fund in the United States with $34 billion in assets as of 2007. Formed in 2000 when Chase Manhattan Corporation acquired J.P. Morgan & Co., the firm serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and governmental clients.
The JPMorgan brand is used by the Investment Bank as well as the Asset Management, Private Banking, Private Wealth Management, and Treasury & Securities Services Divisions. Fiduciary activity within Private Banking and Private Wealth Management is done under the aegis of JPMorgan Chase Bank, N.A.—the actual trustee. The Chase brand is used for credit card services in the United States and Canada, the bank's retail banking activities in the United States, and commercial banking.
JP Morgan Chase is one of the Big Four Banks of United States with Bank of America, Citigroup and Wells Fargo.
* 1 Business
o 1.1 Key financial data
* 2 History
o 2.1 Chemical Banking Corporation
o 2.2 Chase Manhattan Bank
o 2.3 J.P. Morgan & Company
o 2.4 Bank One Corporation
o 2.5 Bear Stearns
o 2.6 Washington Mutual
o 2.7 Collegiate Funding Services
o 2.8 Other recent acquisitions
o 2.9 Acquisition History
* 3 Banking subsidiaries
* 4 Offices
* 5 Controversy
o 5.1 Legal proceedings
+ 5.1.1 WorldCom
+ 5.1.2 Enron
o 5.2 Government subsidies and incentives
o 5.3 Home Foreclosures Continue in 2009
* 6 Major sponsorships
* 7 Notable former employees
o 7.1 Business
o 7.2 Politics and public service
o 7.3 Others
* 8 Notable awards
* 9 See also
o 9.1 Index products
* 10 References
* 11 External links
JPMorgan Chase’s activities are organized, for management reporting purposes, into six business segments:
* Investment Bank
o Investment banking: advisory; debt and equity underwriting
* Market making and trading: Fixed income, Equity)
o Corporate lending
o Principal investing
* Retail Financial Services
o Regional banking: Cconsumer and business banking; home lending; education lending
o Mortgage banking
o Auto finance
* Card Services
o Credit cards
o Merchant acquiring
* Commercial Banking
o Middle market banking
o Mid-corporate banking
o Real estate banking
o Chase business credit
o Chase equipment leasing
o Chase Capital Corporation
* Treasury & Securities Services
o Treasury Services
o Investor Services
o Clearance and Agency
* Asset Management
o Investment management
o Private bank
o Private client services
* Corporate - Includes the company's private equity (One Equity Partners, Treasury and Corporate functions.
 Key financial data
Financial data in $ millions Year 2004 2005 2006 2007
Revenue 43,097 54,533 61,437 71,372
EBITDA 7,140 13,740 22,218
Net Income 4,466 8,483 14,444 15,365
Employees 160,968 168,847 174,360 180,667
JPMorgan Chase logo, prior to the 2008 rebranding
JPMorgan Chase, as it exists since 2008, is the result of the combination of several large U.S. banking companies over the last decade including Chase Manhattan Bank, J.P. Morgan & Co., Bank One, Bear Stearns and Washington Mutual. Going back further, its predecessors include major banking firms among which are Chemical Bank, Manufacturers Hanover, First Chicago Bank, National Bank of Detroit, Texas Commerce Bank, Providian Financial and Great Western Bank.
 Chemical Banking Corporation
Main article: Chemical Banking Corporation
Chemical Bank Logo used prior to its merger with Chase Manhattan Bank
The New York Chemical Manufacturing Company was founded in 1823 as a maker of various chemicals. In 1824, the company amended its charter to perform banking activities and created the Chemical Bank of New York. After 1851, the bank was separated from its parent and grew organically and through a series of mergers, most notably with Corn Exchange Bank in 1954, Texas Commerce Bank (a large bank in Texas) in 1986, and Manufacturer's Hanover Trust Company in 1991 (the first major bank merger "among equals"). At many points throughout this history, Chemical Bank was the largest bank in the United States (either in terms of assets or deposit market share).
In 1996, Chemical acquired the Chase Manhattan Corporation taking the more prominent Chase name. In 2000, the combined company acquired J.P. Morgan & Co. and combined the two names to form what is today JPMorgan Chase & Co. JPMorgan Chase retains Chemical Bank's headquarters at 277 Park Avenue and stock price history.
 Chase Manhattan Bank
Main article: Chase Manhattan Bank
Logo used by Chase prior to rebranding and its merger with J.P. Morgan & Co. Created by Chermayeff & Geismar.
The Chase Manhattan Bank was formed upon the 1931 purchase of Chase National Bank (established in 1877) by the Bank of the Manhattan Company (established in 1799), the company's oldest predecessor institution. The Bank of the Manhattan Company was the creation of Aaron Burr, who transformed The Manhattan Company from a water carrier into a bank.
Led by David Rockefeller during the 1970s and the 1980s, Chase Manhattan emerged as one of the largest and most prestigious banking concerns, with leadership positions in syndicated lending, treasury and securities services, credit cards, mortgages, and retail financial services. Weakened by the real estate collapse in the early 1990s, it was acquired by Chemical Bank in 1996 but retained the Chase name. Prior to its merger with J.P. Morgan & Co., Chase acquired San Francisco-based Hambrecht & Quist in 1999 for $1.35 billion.
According to page 114 of An Empire of Wealth by John Steele Gordon, the origin of this strand of JPMorgan Chase's history runs as follows:
“At the turn of the nineteenth century, obtaining a bank charter required an act of the state legislature. This of course injected a powerful element of politics into the process and invited what today would be called corruption but then was regarded as business as usual. Hamilton's political enemy—and eventual murderer—Aaron Burr was able to create a bank by sneaking a clause into a charter for a company, called the Manhattan Company, to provide clean water to New York City. The innocuous-looking clause allowed the company to invest surplus capital in any lawful enterprise. Within six months of the company's creation, and long before it had laid a single section of water pipe, the company opened a bank, the Bank of the Manhattan Company. Still in existence, it is today J.P.Morgan Chase, the second largest bank in the United States.”
 J.P. Morgan & Company
Main article: J.P. Morgan & Co.
J.P. Morgan & Co. logo prior to its merger with Chase Manhattan Bank in 2000
The heritage of the House of Morgan traces its roots back to the partnership of Drexel, Morgan & Co. which in 1895, was renamed J.P. Morgan & Co. (see also: J. Pierpont Morgan). Arguably the most influential financial institutions of its era, J.P. Morgan & Co. financed the formation of the United States Steel Corporation, which took over the business of Andrew Carnegie and others and was the world's first billion-dollar corporation. In 1895, J.P. Morgan & Co. supplied the United States government with $62 million in gold to float a bond issue and restore the treasury surplus of $100 million. In 1892, the company began to finance the New York, New Haven and Hartford Railroad and led it through a series of acquisitions that made it the dominant railroad transporter in New England.
September 16, 1920: a bomb exploded in front of the headquarters of J.P. Morgan Inc. at 23 Wall Street, injuring 400 and killing 38 people.
Built in 1914, 23 Wall Street was known as the "House of Morgan," and for decades the bank's headquarters was the most important address in American finance. At noon, on September 16, 1920, a terrorist bomb exploded in front of the bank, injuring 400 and killing 38. Shortly before the bomb went off, a warning note was placed in a mailbox at the corner of Cedar Street and Broadway. The warning read: "Remember we will not tolerate any longer. Free the political prisoners or it will be sure death for all of you. American Anarchists Fighters." While theories abound about who was behind the Wall Street bombing and why they did it, after twenty years of investigation the FBI rendered the file inactive in 1940 without ever finding the perpetrators.
In August 1914, Henry P. Davison, a Morgan partner, traveled to the UK and made a deal with the Bank of England to make J.P. Morgan & Co. the monopoly underwriter of war bonds for UK and France. The Bank of England became a "fiscal agent" of J.P. Morgan & Co. and vice versa. The company also invested in the suppliers of war equipment to Britain and France. Thus, the company profited from the financing and purchasing activities of the two European governments.
In the 1930s, all J.P. Morgan & Co. along with all integrated banking businesses in the United States, was required by the provisions of the Glass-Steagall Act to separate its investment banking from its commercial banking operations. J.P. Morgan & Co. chose to operate as a commercial bank, because at the time commercial lending was perceived to be more profitable and prestigious business in the post depression era. Additionally, many within J.P. Morgan believed that a change in the climate would allow the company to resume its securities businesses but it would be nearly impossible to reconstitute the bank if it were disassembled.
In 1935, after being barred from securities business for over a year, the heads of J.P. Morgan made the decision to spinoff its investment banking operations. Led by J.P. Morgan partners, Henry S. Morgan (son of Jack Morgan and grandson of J. Pierpont Morgan) and Harold Stanley, Morgan Stanley was founded on September 16, 1935 with $6.6 million of nonvoting preferred stock from J.P. Morgan partners. In order to bolster its position, in 1959, J.P. Morgan merged with the Guaranty Trust Company of New York to form the Morgan Guaranty Trust Company. The bank would continue to operate as Morgan Guaranty through the 1980s before beginning to migrate back toward the use of the J.P. Morgan brand. In 1984, the group finally purchased the Purdue National Corporation of Lafayette Indiana, uniting a history between the two figures of Salmon Portland Chase and John Purdue. In 1988, the company once again began operating exclusively as J.P. Morgan & Co.
 Bank One Corporation
Main article: Bank One Corporation
Bank One logo used prior to its merger with JPMorgan Chase
In 2004, JPMorgan Chase merged with Bank One Corp., bringing on board current chairman and CEO Jamie Dimon as president and COO and designating him as CEO William B. Harrison, Jr.'s successor. Dimon's pay was pegged at 90% of Harrison's. Dimon quickly made his influence felt by embarking on a cost-cutting strategy and replaced former JPMorgan Chase executives in key positions with Bank One executives—many of whom were with Dimon at Citigroup. Dimon became CEO in January 2006 and Chairman in December 2006.
Bank One Corporation was formed upon the 1998 merger between Banc One of Ohio and First Chicago NBD. These two large banking companies had themselves been created through the merger of many banks. This merger was largely considered a failure until Jamie Dimon—recently ousted as President of Citigroup—took over and reformed the new firm's practices—especially its disastrous technology mishmash inherited from the many mergers prior to this one. Mr. Dimon effected more than sufficient changes to make Bank One Corporation a viable merger partner for JPMorgan Chase.
Bank One Corporation traced its roots to First Bancgroup of Ohio, founded as a holding company for City National Bank of Columbus, Ohio and several other banks in that state, all of which were renamed "Bank One" when the holding company was renamed Bank One Corporation. With the beginning of interstate banking they spread into other states, always renaming acquired banks "Bank One", though for a long time they resisted combining them into one bank. After the NBD merger, adverse financial results led to the departure of CIO John B. McCoy, whose father and grandfather had headed Banc One and predecessors. Jamie Dimon, a former key executive of Citigroup, was brought in to head the company. JPMorgan Chase completed the acquisition of Bank One in 2004.
 Bear Stearns
Main article: Bear Stearns
Bear Stearns logo
At the end of 2007, Bear Stearns was the fifth largest investment bank in the United States but its market capitalization had deteriorated through the second half of 2007. On Friday, March 14, 2008 Bear Stearns & Co. Inc. lost 47% of its market value to close at $30.00 per share as rumors emerged that clients were withdrawing capital from the bank. Over the following weekend it emerged that Bear Stearns might prove insolvent and on or around March 15, 2008 the Federal Reserve engineered a deal to prevent a wider systemic crisis from the collapse of Bear Stearns.
On March 16, 2008, JPMorgan Chase announced that it had plans to acquire Bear Stearns & Co. Inc. in a stock swap worth $2.00 per share or $240 million pending mutual shareholder approval scheduled within 90 days. Until then, JPMorgan Chase has agreed to guarantee all Bear Stearns trades and business process flows. Two days later, on March 18, 2008, JPMorgan Chase announced the acquisition of Bear Stearns for $236 million. The stock swap agreement was completed in the late night hours of March 18, 2008, with JPMorgan exchanging 0.05473 of each of its shares for one Bear share, which were valued at $2 each. 
On March 24, 2008, a revised offer was announced at approximately $10 per share. Under the revised terms, JPMorgan immediately acquired a 39.5% stake in Bear Stearns (using newly issued shares) at the new offer price and gained a commitment from the board (representing another 10% of the share capital) that its members would vote in favour of the new deal. The merger was completed by June 2, 2008 and Bear Stearns is currently part of JPMorgan Chase.
 Washington Mutual
Main article: Washington Mutual
Washington Mutual logo
On September 25, 2008; JPMorgan Chase bought most of the banking operations of Washington Mutual from the receivership of the FDIC. That night, the Office of Thrift Supervision had seized Washington Mutual Bank and placed it into receivership in by far the largest bank failure in American history. The FDIC sold the bank's assets, secured debt obligations and deposits to JPMorgan Chase & Co for $1.836 billion, which re-opened the bank the following day. As a result of the takeover, Washington Mutual shareholders lost all their equity.
JPMorgan Chase raised $10 billion in a stock sale to cover writedowns and losses after taking on deposits and branches of Washington Mutual. Through the acquisition, JPMorgan Chase now owns the former accounts of Providian Financial, a credit card issuer WaMu acquired in 2005. The company announced plans to complete the rebranding of Washington Mutual branches to Chase by late 2009.
 Collegiate Funding Services
In 2006, JPMorgan Chase purchased Collegiate Funding Services, a portfolio company of private equity firm Lightyear Capital, for $663 million. CFS was used as the foundation for the Chase Student Loans, previously known as Chase Education Finance.
 Other recent acquisitions
On April 7, 2006, JPMorgan Chase announced it would be swapping its corporate trust unit for The Bank of New York Co.'s retail and small business banking network. The swap valued The Bank of New York business at $3.1 billion and JPMorgan's trust unit at $2.8 billion and gives Chase access to 338 additional branches and 700,000 new customers in the New York, New Jersey, and Indiana operations
On March 26, 2008, JPMorgan acquired the UK-based carbon offsetting company ClimateCare. 
 Acquisition History
The following is an illustration of the company's major mergers and acquisitions and historical predecessors (this is not a comprehensive list):