Introduction
JPMorgan Chase Bank was opened in 1799 as the Bank of Manhattan. Currently, the bank has spread its operations in almost all the corners of the world (85 countries to be specific) and employs a staff of approximately 260,965. It has more than five thousand one hundred branches and sixteen thousand one hundred ATMs nationwide. Chase currently has $2.509 trillion assets.
JPMorgan Chase Bank is one of the oldest, biggest and most popular financial institutions all over the world. Its legacy dates back to the year 1799 when the earliest predecessor of the bank was chartered in the city of New York.
The firm is founded on more than 1200 other predecessor institutions. The major heritage firms are — J.P. Morgan, Chemical, Chase Manhattan, Manufacturers Hanover (New York City), Bank One, Detroit National Bank (Midwest) and First Chicago . Each of these was closely tied during their time, to the innovations in finance as well as the growth of global economies and the economy of the United States. These firms made noteworthy contributions to the local communities they were in, just as JP Morgan bank continues to do today.
Historical Background
Aaron Burr founded Chase bank as The Manhattan Company on 1 September 1799. This created a feud with Alexander Hamilton’s Bank, which was the only one in the region at the time. It led to a duel that ended in the death of Hamilton. Many years later, the Manhattan Company amalgamated with Chase National Bank. The two entities formed Chase Manhattan Bank.
The Chase National Bank was named after the Chief Justice Salmon Chase, and was founded by John Thompson in 1877. The Chase National bank acquired many other banks in the 1920s through Chase Securities Corporation. Its biggest acquisition during this time was the Equitable Trust Company, whose largest shareholder was John Rockefeller Jr. This made it the biggest bank in America. It has since purchased many banks and merged with many others.
During this time, Chase was mainly a wholesale bank and it dealt with corporate clients and other financial institutions. It also worked closely with many oil companies, including ExxonMobil, which also belonged to Rockefeller holdings.
One of the most notable points in history came in 1955, when Manhattan Company amalgamated with Chase National Bank. The new entity was named Chase Manhattan Bank. In July 1996, it was purchased by Chemical Bank New York. Chemical Bank had also previously acquired Manufacturers Hanover Corporation and Texas Commerce Bank in 1991 and 1987. It was later renamed to Chase Bank. In December 2000, it acquired J.P. Morgan & Company, one of the biggest banking mergers ever.
The company was renamed J. P Morgan Chase. It acquired Bank One in 2004, and became the biggest credit card issuing company in America. It acquired Washington Mutual and Bear Sterns and Company in 2009. It closed almost four hundred overlapping branches of this company.
Controversies during World War II
During the earlier years of the second war in Europe, the government of Germany sold special kinds of Reichsmark, which were known as Rückwanderer [or returnee] marks, to the American citizens who were of German descent. Along with other companies, Chase National Bank was involved in these dealings. Through Chase, Nazi sympathizers were able to purchase marks using dollars at a lower rate. The financial houses knew that the government of Germany paid the commission [to its agents, which included Chase] through its sale of discounted and blocked marks which came mainly from the Jews who had ran away from Nazi Germany. Nazi Germany could offer the marks at this discounted rate because this money had been illegally acquired or stolen in the very first place. From the year 1936 to1941, the Germans brought in more than $20 million. The businesses that enabled these transactions earned 1.2 million dollars in commissions. Over 500,000 dollars went to Chase National Bank.
Chase Bank and Capital Market
Chase bank plays a very important role in capital markets. They buy and sell equity-backed securities and long- term debts. They channel the wealth of the people saving money with the bank to the people who are able to put it to productive use in the long-term, such as governments and companies, making long-term investments. In the USA, the SEC (U.S. Securities and Exchange Commission) oversees this to protect the investors against fraud.
Chase bank underwrites the issuing of new bonds and stocks, which are then sold to investors. They also give long- term loans to entities or individuals who repay them with interest. The main entities, which seek to raise funds on the long-term on primary capital markets, include governments (municipal, national, or local) and business enterprises (mostly companies). Governments tend to only issue bonds, whereas companies may often issue either bonds or equity. Chase bank also purchases the stock or bonds and trades them on their behalf or on behalf of their clients.
Chase bank also trades in secondary markets, where existing securities are bought and sold among investors. Here, the investors can swiftly cash out the investments as need arises.
Chase bank has for many years participated in the selling and buying of financial securities such as bonds and stocks. They invest their client’s money and trade in long-term securities.
Chase code of ethics
Code of Ethics for Employees
The code of ethics sets ethical and legal standards governing the conduct of officers and employees of Chase bank. It is meant to uphold integrity and deter wrongdoing in the company.
The Employees are expected to act integrity, honesty, and independence, and avoid conflict of interest between their professional and personal relationships. They are also expected to discuss with the relevant officials any relationship that could lead to such conflicts and find a solution. Employees are also expected to provide full, accurate, timely, understandable and fair financial disclosures of internal and other reports that are submitted or filed by the corporation to regulatory bodies such as SEC. This includes documents used in public communications.
The use of company property can only be done if it is for the benefit of the clients of the company, or the company itself. They are also expected to comply with all the applicable government and stock exchange rules and regulations. They are expected to follow the code of ethics full and report any breech of the code through the formal channels. Violation of the code would result in serious disciplinary action, which could include termination of employment.
Directors Code of Ethics
This code of ethics is meant to govern the behavior of Directors of the company. This Code is meant to provide direction for Directors to enable them to deal with and recognize ethical issues. It is also meant to provide mechanisms for reporting possible issues on compliance and promote a culture of accountability and honesty. Directors of the company are expected to abide by all the rules and regulations stipulated in the code.
Although the code may not anticipate every possible situation that could arise, this Code is meant to provide the guiding principles for the Directors. They may raise questions on particular circumstances, which may be in any way relevant to the Code. They are expected to read the code and comply fully with it.
Conflict of Interest
Directors are expected to avoid all conflicts of interest either between themselves or with the Company. In the event that a Director believes that they have potential or an actual conflict of interest with Chase, they should inform the Lead Director promptly and should not participate in decision making by the Board in matters relating to the conflict of interest. The term “conflict of interest” is used in the sense that some situations can arise whereby the personal interests of the director interfere, or appear to interfere with Company interest. A conflict situation could arise where the Director takes an action or has an interest that would render it impossible for him or her to perform their work as Company Director effectively and objectively. Conflicts of interest could also arise in situations where the Director, or members of his or her close family, receives improper benefits resulting from his or her esteemed position as the Director. This includes a spouse, parents, sibling, children, fathers-in-law, mothers-in-law and daughters and sons-in-law, sisters and brothers-in-law, and anyone else (with the exception of domestic employees) who may share the home of the Director.
Corporate Opportunities
Directors are not allowed to (a) take for themselves any opportunity that is discovered through Company property, position or information, (b) use Company property, position or information for their personal gain, and (c) compete with the Company for any business opportunities.
Confidentiality
All the Directors working for the company should maintain the confidentiality of all confidential information, which is entrusted to them while they work for the company, by the Company, as well as any other information that come to them and may be considered confidential, about the Company. This is with the exception of when this revelation is legally mandated or authorized by Lead Director. This includes all proprietary or nonpublic information, which relates to the Company.
Compliance with Rules, Regulations and Laws
The Directors of the company are expected to comply with laws, regulations and rules applicable to them in their position as Company Directors at Chase.
Fair Dealing and Competition
All the Directors are expected to endeavor to deal very fairly with the customers, competitors, employees and suppliers of the company. They must not take unjust advantage of any person through manipulation, concealment, misrepresentation of the material facts, abuse of their privileged information, or through any other unfair-dealing practice that is intentional.
Protection and Proper Use of Company Assets
The Directors are not allowed to use Company assets, information or labor for their personal gain or benefit. They may only use it if it will benefit the company of the clients of the company
Insider Trading
Directors are not allowed to engage in Company stock transactions (whether for personal account belonging to them, for the accounts belonging to the company otherwise) while they are in possession of material, and nonpublic information. They are also not allowed to communicate this information to other third parties that could use such information when making decisions to sell or purchase Company stock (this is commonly referred to as “tipping”). The policy will also apply to any information relating to other companies, including the customers and suppliers of the company, that the Director obtained in the course of his service as a board member. In addition, on top of violating Company policy, tipping and insider trading are illegal. Information could be material if substantial likelihood exists that the information could affect the prices of the stock of the Company that reasonable investors would consider this information significant when deciding whether to sell or buy the Company stock. This type of information includes all information that relates to capital structure, contemplated divestitures or acquisitions, information concerning earnings, major management changes, or any other financial information. The information is considered non-public if the company, through its officials, has not disclosed it to the public. Information is considered to have been revealed to the public if the company has published it in the media or newspapers, has been a subject of press release or has been publicly filed with the SEC. for all these, at least forty eight hours must have passed since the publication, filing or release.
Compliance Procedures
The Directors are expected to communicate any type of suspected violations of the Code, including violation of governmental rule, regulation, or law promptly to the General Counsel of the company or the Lead Director. Any alleged violation is subject to investigation by the Board or by one person or several persons designated to this role by the Board. Appropriate action will be taken in case of any violation of this Code.
Waivers
Waivers of the Code shall only be granted under exceptional circumstances. This waiver of the Code may only be made by the Board. It must also be promptly disclosed according to the applicable requirements and laws of the governing body, American Stock Exchange Corporate Governance Standards.
Yearly Reviews
The Board shall reassess and review the adequacy of the Code annually, making any necessary amendments to the Code as the Board finds appropriate.
Conclusion
Chase Bank has come a long way to becoming the reputable organization it is today. Although it had its share of troubles, especially during the Second World War, its resilience ensured that it remained in the market and conquered all obstacles thrown its way.
References
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Miller, F. P. (2009). JPMorgan Chase. New York: Alphascript Publishing.
Rockefeller, D. (1964). Creative management in banking. New York: McGraw-Hill Book Co.
Vandome, A. F. (2010). Chase Bank . New York: VDM Publishing.
Wilson, J. D. (1986). The Chase:The Chase Manhattan Bank. Harvard: Harvard Business School
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