JP Morgan’s Suitability Controversy Resurfaces

I’ve long maintained that JP Morgan stands to lose significantly if a universal suitability standard were to be implemented across the financial industry. Why? Because the firm frequently offers proprietary investment products to clients—even when other options may be more appropriate. While difficult to prove, back in 2013, former JP Morgan broker Nathaniel Popper publicly alleged that he was pressured to sell the firm’s proprietary investments rather than independent alternatives.

The story gained traction when the New York Times published Popper’s account. However, things took a dramatic turn just weeks later: Popper’s former clients began filing complaints—only they didn’t actually write them. According to Popper, JP Morgan itself authored the complaints using clients’ names, making it nearly impossible for him to find employment elsewhere and weakening his wrongful termination case.

This situation is notable for two reasons. First, it reflects a growing shift in the industry toward acting in the client’s best interest—rather than the firm’s. Second, it demonstrates the extreme measures some firms may take to protect their reputation and bottom line.

Should Yahoo Sell Itself?

There’s been growing chatter about whether Yahoo should sell off its core business. Interestingly, the company holds valuable shares in both Alibaba and Yahoo Japan—assets that overshadow the value of Yahoo’s actual operations.

A recent Bloomberg article suggests that Yahoo’s core business may even have a negative valuation. This is largely due to tax implications: since the shares in Alibaba and Yahoo Japan have appreciated so much, they can’t be valued at their full pre-tax price. After adjusting for taxes, Yahoo’s remaining value doesn’t look impressive.

Yahoo’s own senior vice president for communications, Jeff Bonforte, summed up the company’s situation rather awkwardly by saying, “I just try to ship products that I’m not ashamed of.” Not exactly a confidence-inspiring statement for investors or buyers.

Bitcoin Mining Meets the SEC

The SEC recently cracked down on two bitcoin mining companies accused of running a Ponzi scheme. These firms were selling bitcoin-based investments that turned out to be fraudulent. According to the SEC, the operation ran from August 2014 to January 2015, during which bitcoin lost about 60% of its value.

In a twist that highlights just how brutal the crypto market can be, the SEC stated: “Most…investors never recovered the full amount of their investments, and few made a profit.” Few made a profit—in a Ponzi scheme? That might be a first. It’s a sobering reminder that in volatile markets, even fraud can look like a safer bet than the real thing.

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