30 ms·

The Widow, the Bank, and the $8B Verdict

59 points by ALee 9y ago

jnwatson 9y ago
The odd thing about this case is how there wasn’t anything unusual about the estate. Heirs disagree all the time. That’s the point of hiring an independent administrator. How could the bank have screwed this up so badly?
- zentiggr 9y ago
  Greed, incompetence, greed, a culture inured to fraud if at all possible, and greed. With a liberal dose of "even if we have to pay up it'll never make a dent in the revenue stream, so who gives a rat-f*?"
- jVinc 9y ago
  They started with a small screw-up. (Favoring the widow in order to close an investment account). Then let on with a slightly larger screw-up (Favoring the children in order to get back at the widow for closing that account). Then made the huge screw-up of trying to break the law and force the widow to sell the house. Then they made the gigantic mistake of using up the estate to fight both sides in court. Then they made the mind-blowingly huge mistake of indebting the estate to themselves to keep that fight going. It's just one long series of someone screwing up badly and thinking "wait!? I can fix this, I've got a crazy idea that just might work", then proceeding to fuck up even more. Though with the lengthy timescale it would not at all surprise me if someone got promoted several times for the (prior to the verdict) "great" handling of the afairs. Whoever went to the boss saying "yea, we drained the entire estate into legal fees for our-selves, and now we're even indebting it while keeping both sides fighting" would have at the time been seen by them as a candidate for employee of the year. The 8 billion is outrageous and far too much, but I would love to live in a world where they actually had to pay that amount. Maybe not all to the victims, but most of it to some charities and non-profit organisations fighting for citizens rights against banks. It would seriously send a signal that all this kind of just horrible behavior on the part of the banks isn't profitable in the long run, and could potentially blow your entire organisation out of the water. Making things like moral codes and proper training actually matter to them. As it is, they'll likely just pay a couple of million and scrug it off as an ok attempt at stealing from their clients. The 99 other cases where it actually worked will foot the bill for this time when it failed.
  - teh_klev 9y ago
    > screwing up badly and thinking "wait!? I can fix this, I've got a crazy idea that just might work" Reminds me of that scene at the end of American Made, where Monty Schafer drops by a colleague's office and says (paraphrased) "Here's an idea, let's sell arms to Iran". In other words: we're gonna need a bigger shovel.
woliveirajr 9y ago
> Still, the verdict did generate some bad publicity for the bank. And there goes the Streisand effect. $8B isn't something the bank will take slightly, but the more this case is discussed, more people will hear about it and (probably) avoid hiring this bank in the future. I don't think this kind of service is a significant insource for the bank, but also think it should be much, much cheaper had the bank taken some care with this case.
- harryh 9y ago
  That's not what the Streisand Effect is. The Streisand Effect is when an attempt to censor information from becoming public backfires and instead spreads the information more widely due to public attention.
lobe 9y ago
> Once the children discovered the estate’s money was being used to pay the bank’s lawyers in the legal fight, they asked for the bank to stop using the account. JPMorgan did not comply. Eventually, the account was drained of all but $100, just enough to keep the account open. Then JPMorgan made its own novel legal move. The estate, as administered by the bank, took out a loan, from JPMorgan, for more than $900,000. The bank, in other words, loaned itself money, indebting the estate in the process. Wow, just wow. Usually when I read articles about an investment bank doing something dodgy, I can play devil's advocate and talk it through from their point of view. But this time I am struggling to do that. So many things were done that were not just morally wrong, but legally too. I struggle to believe there was no one at JP who didn't point this out.
- option_greek 9y ago
  No wonder Dimon hates CryptoCurrencies and Bitcoin in particular. Sadly, people now fall in the same pitfall by keeping their coins on an exchange.
  - JumpCrisscross 9y ago
    The estate was intestate. How would Bitcoin have helped?
    - imron 9y ago
      Take the keys from the cold storage in the safe in the deceased's office, and the bitcoin are now yours. /s
      - tankenmate 9y ago
        Then a probate judge will issue a bench warrant for your arrest.
        imron 9y ago
        I have no idea what you're talking about your honor. What's a bitcoin? I never saw any bits of any coins and the safe has a combination lock, not a key, how could I take the key? My original post wasn't being serious (hence the /s), but if there's no proof of you taking them and no activity on the blockchain for the wallet, there's not much that can be done.
jacquesm 9y ago
First world problems, 6700 putters and 900 bottles of fine wine. That said, the bank behaved in a terrible way, but the most important takeaway is that if you have any wealth at all make sure you leave a properly signed and witnessed will.
- throwwwwaway9 9y ago
  That's the most shocking thing for me. A bank will try to screw you every way possible. I guess, they want year-end-bonuses and by the time lawsuits are filed no one will care. >>First world problems, 6700 putters and 900 bottles of fine wine. First world problems until the bank got involved and took away the "first world problem" thing from them.
  - jacquesm 9y ago
    The bank got involved at their joint invitation. That doesn't excuse anything the bank did but they really should have been able to work this out amongst themselves. Just to see the 'children' (well, they behave like children anyway) bicker over the perceived use of airmiles without any proof whatsoever in an estate of this magnitude sets the tone nicely.
    - deleted 9y ago
      [deleted]
- kemiller2002 9y ago
  I disagree, it's not "first world problems." Largely the saving grace of the family was that they are extremely wealthy. They had the money to hire attorneys to stand up to the bank. In most instances, the bank would have been able to do what they want, because 99% of the people lack the funds for an actual legal fight. What makes the article new worthy is that the bank lost when it overstepped its bounds, and that this was only possible for someone with an estate of several million dollars. It shows how biased the American legal system is against people without money. How did I come to this conclusion? It's simple, JPMC clearly knows what they are doing when it comes to probate and the legal system. This wasn't some novel plan they had to make money on estate. They knew exactly what they were doing and what moves they could play. It was a shock to them that they lost, and they lost because the plaintiffs had a legal team that could understand and combat it. Most attorneys couldn't handle a case like this, and those that do aren't cheap.
a2tech 9y ago
And to believe this all started over a misunderstanding over airline miles.
- throwwwwaway9 9y ago
  Nah, built over years most likely. Like getting divorced because "he throws his socks on the floor." That's the match that lights the fire of hay gathered over decades
  - a2tech 9y ago
    Yeah there's obviously some tension from the kids and the stepmom. But if you read the article everything was starting ok enough until the kids thought she was using his miles which they were entitled too (as an aside, what a stupid thing to throw a fit over)
    - compiler-guy 9y ago
      The airlines miles were just an example. There was much more.
tomohawk 9y ago
This is why it is so important to have a will and other documents (such as advanced directives) in order, and to make family members aware of all the arrangements. There are all kinds of sharks in the financial and legal industry that prey on unprepared people. I and people I know have been screwed by these types, and it always comes down to not having a will. If you don't have a will, you're subjecting those you care for to dealing with these sharks. Don't do that to them.
- user5994461 9y ago
  You might have missed the part where the widow and the children couldn't agree on who gets what at any point in the last 10 years. They sued each other and sued the bank instead of splitting the estate. As always, the sharks are in the family. Your descendant would rather have the whole fortune dilapidated than miss a dollar of it.
  - FireBeyond 9y ago
    Yeah, my (effective) mother in law had this issue with her father and his (second) wife. He died without a legal will (what he did write was hand written, holes so large you could drive a truck through, and un-witnessed). Though the estate was modest (maybe $400K in home, vehicles, stocks) and could easily have been divided pretty equitably with the second wife (who was pretty recently married to him), the two of them's inability to get along, and always think that the other was plotting against them... lead to long drown out probate court challenges, and in the end they walked away with less than $100K between them, burning the rest in the process.
razorunreal 9y ago
I wonder if it would be possible to have a clause in your will stating that if any family member sues any other family member, the whole lot goes to charity. Bonus points if you can get a legal professional to utter the words "and you can all eat shit".

59 points by ALee 9y ago

The odd thing about this case is how there wasn’t anything unusual about the estate. Heirs disagree all the time. That’s the point of hiring an independent administrator. How could the bank have screwed this up so badly?

zentiggr 9y ago
Greed, incompetence, greed, a culture inured to fraud if at all possible, and greed. With a liberal dose of "even if we have to pay up it'll never make a dent in the revenue stream, so who gives a rat-f*?"
jVinc 9y ago
They started with a small screw-up. (Favoring the widow in order to close an investment account). Then let on with a slightly larger screw-up (Favoring the children in order to get back at the widow for closing that account). Then made the huge screw-up of trying to break the law and force the widow to sell the house. Then they made the gigantic mistake of using up the estate to fight both sides in court. Then they made the mind-blowingly huge mistake of indebting the estate to themselves to keep that fight going. It's just one long series of someone screwing up badly and thinking "wait!? I can fix this, I've got a crazy idea that just might work", then proceeding to fuck up even more. Though with the lengthy timescale it would not at all surprise me if someone got promoted several times for the (prior to the verdict) "great" handling of the afairs. Whoever went to the boss saying "yea, we drained the entire estate into legal fees for our-selves, and now we're even indebting it while keeping both sides fighting" would have at the time been seen by them as a candidate for employee of the year. The 8 billion is outrageous and far too much, but I would love to live in a world where they actually had to pay that amount. Maybe not all to the victims, but most of it to some charities and non-profit organisations fighting for citizens rights against banks. It would seriously send a signal that all this kind of just horrible behavior on the part of the banks isn't profitable in the long run, and could potentially blow your entire organisation out of the water. Making things like moral codes and proper training actually matter to them. As it is, they'll likely just pay a couple of million and scrug it off as an ok attempt at stealing from their clients. The 99 other cases where it actually worked will foot the bill for this time when it failed.
- teh_klev 9y ago
  > screwing up badly and thinking "wait!? I can fix this, I've got a crazy idea that just might work" Reminds me of that scene at the end of American Made, where Monty Schafer drops by a colleague's office and says (paraphrased) "Here's an idea, let's sell arms to Iran". In other words: we're gonna need a bigger shovel.

woliveirajr 9y ago

> Still, the verdict did generate some bad publicity for the bank. And there goes the Streisand effect. $8B isn't something the bank will take slightly, but the more this case is discussed, more people will hear about it and (probably) avoid hiring this bank in the future. I don't think this kind of service is a significant insource for the bank, but also think it should be much, much cheaper had the bank taken some care with this case.

harryh 9y ago
That's not what the Streisand Effect is. The Streisand Effect is when an attempt to censor information from becoming public backfires and instead spreads the information more widely due to public attention.

lobe 9y ago

> Once the children discovered the estate’s money was being used to pay the bank’s lawyers in the legal fight, they asked for the bank to stop using the account. JPMorgan did not comply. Eventually, the account was drained of all but $100, just enough to keep the account open. Then JPMorgan made its own novel legal move. The estate, as administered by the bank, took out a loan, from JPMorgan, for more than $900,000. The bank, in other words, loaned itself money, indebting the estate in the process. Wow, just wow. Usually when I read articles about an investment bank doing something dodgy, I can play devil's advocate and talk it through from their point of view. But this time I am struggling to do that. So many things were done that were not just morally wrong, but legally too. I struggle to believe there was no one at JP who didn't point this out.

option_greek 9y ago
No wonder Dimon hates CryptoCurrencies and Bitcoin in particular. Sadly, people now fall in the same pitfall by keeping their coins on an exchange.
- JumpCrisscross 9y ago
  The estate was intestate. How would Bitcoin have helped?
  - imron 9y ago
    Take the keys from the cold storage in the safe in the deceased's office, and the bitcoin are now yours. /s
    - tankenmate 9y ago
      Then a probate judge will issue a bench warrant for your arrest.
      - imron 9y ago
        I have no idea what you're talking about your honor. What's a bitcoin? I never saw any bits of any coins and the safe has a combination lock, not a key, how could I take the key? My original post wasn't being serious (hence the /s), but if there's no proof of you taking them and no activity on the blockchain for the wallet, there's not much that can be done.

jacquesm 9y ago

First world problems, 6700 putters and 900 bottles of fine wine. That said, the bank behaved in a terrible way, but the most important takeaway is that if you have any wealth at all make sure you leave a properly signed and witnessed will.

throwwwwaway9 9y ago
That's the most shocking thing for me. A bank will try to screw you every way possible. I guess, they want year-end-bonuses and by the time lawsuits are filed no one will care. >>First world problems, 6700 putters and 900 bottles of fine wine. First world problems until the bank got involved and took away the "first world problem" thing from them.
- jacquesm 9y ago
  The bank got involved at their joint invitation. That doesn't excuse anything the bank did but they really should have been able to work this out amongst themselves. Just to see the 'children' (well, they behave like children anyway) bicker over the perceived use of airmiles without any proof whatsoever in an estate of this magnitude sets the tone nicely.
  - deleted 9y ago
    [deleted]
kemiller2002 9y ago
I disagree, it's not "first world problems." Largely the saving grace of the family was that they are extremely wealthy. They had the money to hire attorneys to stand up to the bank. In most instances, the bank would have been able to do what they want, because 99% of the people lack the funds for an actual legal fight. What makes the article new worthy is that the bank lost when it overstepped its bounds, and that this was only possible for someone with an estate of several million dollars. It shows how biased the American legal system is against people without money. How did I come to this conclusion? It's simple, JPMC clearly knows what they are doing when it comes to probate and the legal system. This wasn't some novel plan they had to make money on estate. They knew exactly what they were doing and what moves they could play. It was a shock to them that they lost, and they lost because the plaintiffs had a legal team that could understand and combat it. Most attorneys couldn't handle a case like this, and those that do aren't cheap.

a2tech 9y ago

And to believe this all started over a misunderstanding over airline miles.

throwwwwaway9 9y ago
Nah, built over years most likely. Like getting divorced because "he throws his socks on the floor." That's the match that lights the fire of hay gathered over decades
- a2tech 9y ago
  Yeah there's obviously some tension from the kids and the stepmom. But if you read the article everything was starting ok enough until the kids thought she was using his miles which they were entitled too (as an aside, what a stupid thing to throw a fit over)
  - compiler-guy 9y ago
    The airlines miles were just an example. There was much more.

tomohawk 9y ago

This is why it is so important to have a will and other documents (such as advanced directives) in order, and to make family members aware of all the arrangements. There are all kinds of sharks in the financial and legal industry that prey on unprepared people. I and people I know have been screwed by these types, and it always comes down to not having a will. If you don't have a will, you're subjecting those you care for to dealing with these sharks. Don't do that to them.

user5994461 9y ago
You might have missed the part where the widow and the children couldn't agree on who gets what at any point in the last 10 years. They sued each other and sued the bank instead of splitting the estate. As always, the sharks are in the family. Your descendant would rather have the whole fortune dilapidated than miss a dollar of it.
- FireBeyond 9y ago
  Yeah, my (effective) mother in law had this issue with her father and his (second) wife. He died without a legal will (what he did write was hand written, holes so large you could drive a truck through, and un-witnessed). Though the estate was modest (maybe $400K in home, vehicles, stocks) and could easily have been divided pretty equitably with the second wife (who was pretty recently married to him), the two of them's inability to get along, and always think that the other was plotting against them... lead to long drown out probate court challenges, and in the end they walked away with less than $100K between them, burning the rest in the process.

razorunreal 9y ago

I wonder if it would be possible to have a clause in your will stating that if any family member sues any other family member, the whole lot goes to charity. Bonus points if you can get a legal professional to utter the words "and you can all eat shit".