Saturday, January 31, 2015
Using data from a unique episode in which the SEC disseminated securities filings to a small group of private investors before releasing them to the public, we provide a direct test of the process through which private information is impounded into stock prices. Because the delay between the time when the filings were privately distributed and when the filings were made public was randomly distributed, our setting provides a rare natural experiment for examining how markets process new private information.
We find that it takes minutes — not seconds — for informed traders to incorporate fundamental information into stock prices. We also show that the private investors who had early access to fundamental information profited more, and convey more information into stock prices, when the delay before the filings are released to the public is longer.
More importantly, the rate at which information is impounded into stock prices is more correlated with the length of the predicted delay before public release than the actual delay, suggesting that informed investors trade strategically.
Our study serves as the modern counterpart to Koudijs’s (2014a) study on insider trading on eighteenth-century stock exchanges — except, in our case, week-long sailing voyages have been replaced by modern electronic transmission as the conduit for information flows.
Friday, January 30, 2015
Investment Daily reports that - Accused alternatives fund manager Daniel Thibeault is fighting back against the Securities and Exchange Commission's request to freeze his assets.
Following criminal and civil complaints filed in recent months in federal court in Massachusetts by the Federal Bureau of Investigation and the SEC, Mr. Thibeault made his first counter arguments last week in federal court in Massachusetts in a document that provides some additional details about the case from Mr. Thibeault's perspective.
The SEC and the FBI both accused Mr. Thibeault of devising a scheme to siphon between $12 and $16 million in assets from a roughly $40 million fund he was managing, the GL Beyond Income Fund, through fictitious loans.
Thursday, January 29, 2015
Banks’ issuance of debt capital is at a record high as lenders look to shore up their balance sheets, reports the FT (£, p30).
Debt issuance by global banks more than doubled to $274.5 billion (£182 billion), prompted by Basel III rules which have raised the level of capital that banks are required to hold.
The FT states that debt capital volumes are set to remain high in the coming years “while regulators debate whether to increase the minimum loss-absorbing capital level for the biggest global banks.” (from the British Bankers Association).
Wednesday, January 28, 2015
British Banker Association reported that the Mail (p12) cited the BBA’s Know Fraud, No Fraud campaign as part of efforts being made by the banking industry to protect consumers from predatory fraudsters.
At the weekend former Bank of Scotland chairman Sir Peter Burt told The Sunday Times that banks should automatically refund customers who are victims of vishing or similar scams and encouraged customers to sue financial institutions that don’t refund.
A spokesman for the BBA said: “Banks are determined to stop such crimes. It is important cases are handled on a case-by-case basis and banks work with customers.”
Tuesday, January 27, 2015
Starting September 2015, University of Amsterdam will offer an Advanced LL.M. of International Taxation in English, limited to just 25 annual candidates from around the world. Applications for one of these seats are open until April.
Renown international tax academic and lawyer Dr. Dennis Weber shared with the Financial Law Prof: "The Advanced LL.M. of International Tax Law is a full-time, one-year program. The curriculum covers both the established framework of international tax law and emerging issues. A fundamental premise is that a proper understanding of this area of the law requires studying both the “big picture” and the technicalities."
“Moreover”, he continued, “the OECD BEPS project is on every tax counsel’s mind, and such discussions normally involve The Netherlands because, as a business friendly jurisdiction for fifty years, it has attracted multinational operations, employment and tax revenue using a ‘carrot’ policy. Other countries are competing for multinationals’ operations, employment and tax revenue with a ‘stick’ policy of imposing high compliance costs to dissuade international activities. The next five years will be an interesting time as the G20 goes head to head to try to peel away these operations and tax revenue from each other.”
“The IBFD is very excited about joining forces with the University of Amsterdam to create an LLM with a teaching programme that is based firmly on the research activities of both institutions and offers a combined theoretical and practical analysis of international tax law.” elaborated Prof. Dr Pasquale Pistone, Chair of the IBFD's Academic Committee.
“There has never been a more exciting time to study international tax law than now" continued Dr. Joanna Wheeler, "the topic is firmly on the public agenda and you can see the whole field developing before your eyes just by reading the news.”
“I am delighted that the longstanding relationship between the UvA and IBFD has resulted in such a promising LLM programme, a programme that takes a holistic and policy-oriented view to taxation and that perfectly fits the current era.” said Prof. Dr Stef van Weeghel. Dr. Weber added, “Studying international tax law in one of the most relaxed cities in the world: a perfect combination.”
Prof. William Byrnes iterated "Dr. Dennis Weber has developed a game changer in Europe with his international tax program, combining the academic quality of University of Amsterdam with the industry reputation of the IBFD.”
Learn more about international students studying in Amsterdam via YouTube
Time Magazine reports that Coinbase, backed by $106 million from venture capital from sources such as the New York Stock Exchange, has opened a Bitcoin Exchange with regulatory approval in 24 states, including New York and California.
The WSJ reports that "Coinbase will take a small percentage, 0.25%, of most transactions and will take no fees for the first two months .... Coinbase counts about 2.2 million consumer wallets and nearly 40,000 merchants that use its services. ... "
Reuters reports "The Winklevoss twins are creating the exchange while they seek approval from the Securities and Exchange Commission to launch a bitcoin exchange-traded fund."
In numerous recorded communications, Sporyshev and Podobnyy discussed their attempts to recruit U.S. residents, including several individuals employed by major companies, and several young women with ties to a major university located in New York City (Time Magazine has identified as NYU), as intelligence sources for the SVR. On these recordings, the defendants discussed the potential value of these sources and identified particular sources by use of a “source name,” which appears to be a coded name. In addition, during these recordings, Sporyshev and Podobnyy discussed the efforts of other SVR agents to recruit a number of other Russian-origin individuals associated with NYU as intelligence sources.
The Russian CIA: The SVR
Buryakov worked in the United States as an agent of Russia’s foreign intelligence agency, known as the SVR. Buryakov operated under “non-official cover,” meaning he entered and remained in the United States as a private citizen, posing as an employee in the Manhattan office of a Russian bank. SVR agents operating under such non-official cover – sometimes referred to as NOCs – typically are subject to less scrutiny by the host government, and, in many cases, are never identified as intelligence agents by the host government. As a result, a NOC is an extremely valuable intelligence asset for the SVR.
Sporyshev and Podobnyy are also SVR agents who worked in the United States to gather intelligence on behalf of Russia by posing as official representatives of Russia. From Nov. 22, 2010, to Nov. 21, 2014, Sporyshev served as a trade representative of the Russian Federation in New York. From Dec. 13, 2012, to Sept. 12, 2013, Podobnyy served as an attaché to the Permanent Mission of the Russian Federation to the United Nations. Based on their official government postings on behalf of Russia, Sporyshev and Podobnyy are exempt from notifying the U.S. Attorney General of the true nature of their work. However, that exemption does not permit them to conspire with, or aid and abet, Buryakov in his work as an unregistered agent of Russia operating within the United States.
Intelligence Gathering Operations
The intelligence-gathering efforts of Sporyshev and Podobnyy included, among other things, attempting to recruit New York City residents as intelligence sources for Russia; tasking Buryakov to gather intelligence; and transmitting intelligence reports prepared by Buryakov back to SVR headquarters in Moscow. Specifically, during the course of the charged offenses, Sporyshev was responsible for relaying assignments from the SVR to Buryakov, and Sporyshev and Podobnyy were responsible for analyzing and reporting back to the SVR about the fruits of Buryakov’s intelligence-gathering efforts.
The directives from the SVR to Buryakov, Sporyshev and Podobnyy, as well as to other covert SVR agents acting within the United States, included requests to gather intelligence on, among other subjects, potential U.S. sanctions against Russian banks and the United States’ efforts to develop alternative energy resources.
Clandestine Meetings and Communications
During the course of their work as covert SVR agents in the United States, Buryakov, Sporyshev and Podobnyy regularly met and communicated using clandestine methods and coded messages, in order to exchange intelligence-related information while shielding their associations with one another as SVR agents. These efforts were designed, among other things, to preserve their respective covers as an employee of a bank in Manhattan (Buryakov), a trade representative of the Russian Federation in New York (Sporyshev) and an attaché to the Permanent Mission of the Russian Federation to the United Nations (Podobnyy). In particular, the defendants worked to safeguard Buryakov’s work as a NOC.
Sporyshev and Podobnyy acted as covert intermediaries for Buryakov to communicate with the SVR on intelligence-related matters. As an agent posing as someone without any official ties to the Russian government or the SVR, Buryakov was unable to access the SVR New York Office – which is located within an office maintained by Russia in New York City – without potentially alerting others to his association with the SVR. As such, Buryakov required the assistance of other SVR agents, like Sporyshev and Podobnyy, to exchange communications and information with the SVR through the communications systems located in the SVR New York Office.
From as early as March 2012 through as recently as mid-September 2014, the FBI has conducted physical or electronic surveillance of Buryakov and Sporyshev engaging in over 48 brief meetings, several of which involved Buryakov passing a bag, magazine or slip of paper to Sporyshev. These meetings typically took place outdoors, where the risk of effective surveillance was reduced relative to an indoor location.
These meetings were nearly always preceded by a short telephone call between Buryakov and Sporyshev, during which one of the men typically told the other that he had an item to give to him. Typically, during these telephone calls, which were intercepted by the FBI, the item in question was referred to as some non-specific ticket, book, list or other ordinary item (e.g., umbrella or hat).
Subsequently, at each meeting surveilled by the FBI, Buryakov and Sporyshev met and sometimes exchanged documents or other small items. Notably, despite discussing on approximately 12 occasions the need to meet to transfer “tickets,” Buryakov and Sporyshev, were – other than one occasion where they discussed going to a movie – never observed attending, or discussing in any detail, events that would typically require tickets, such as a sporting event or concert. In fact, Buryakov and Sporyshev used this coded language to signal that they needed to meet, and then met to exchange intelligence information.
Attempts by Sporyshev and Podobnyy to Recruit Intelligence Sources in New York City
In numerous recorded communications, Sporyshev and Podobnyy discussed their attempts to recruit U.S. residents, including several individuals employed by major companies, and several young women with ties to a major university located in New York City (University-1), as intelligence sources for the SVR. On these recordings, the defendants discussed the potential value of these sources and identified particular sources by use of a “source name,” which appears to be a coded name. In addition, during these recordings, Sporyshev and Podobnyy discussed the efforts of other SVR agents to recruit a number of other Russian-origin individuals associated with University-1 as intelligence sources.
For example, Sporyshev and Podobnyy discussed Podobnyy’s efforts to recruit a male working as a consultant in New York City as an intelligence source. During this conversation, Podobnyy explained his source recruitment method, which included cheating, promising favors and then discarding the intelligence source once the relevant information was obtained by the SVR: “This is intelligence method to cheat. . . . You promise a favor for a favor. You get the documents from him and tell him to go [expletive] himself.”
In other recorded conversations, Sporyshev and Podobnyy made clear that they worked for the SVR. For example, on Jan. 31, 2013, Sporyshev and another SVR agent not charged in the complaint (CC-1) had a discussion inside the SVR New York Office about their contracts with the SVR. Sporyshev stated that, “Everyone has a five-year contract,” and explained, in response to CC-1’s question about reimbursement for the travel of SVR agents’ family members, that “travel for military personnel and their families on authorized home leave is paid, and in our, in our SVR, this, the payment for getting to and from the duty station.” In addition, on April 25, 2013, Sporyshev and Podobnyy discussed the use of nontraditional cover for Russian intelligence officers and, in particular, the Illegals program that ended with the arrest of 10 “deep cover” SVR agents in July 2010.
Buryakov’s Intelligence Taskings
Sporyshev was responsible for relaying intelligence assignments from the SVR to Buryakov. The FBI obtained electronic recordings of several conversations relating to such intelligence directives being communicated to and carried out by Buryakov in his position as an SVR agent acting under non-official cover. For example, on May 21, 2013, Sporyshev called Buryakov to ask for Buryakov’s help in formulating questions to be used for intelligence gathering purposes by others associated with a leading Russian state-owned news organization (the News Organization). Buryakov responded by supplying Sporyshev with a particular line of questioning about the New York Stock Exchange for use by the News Organization.
Buryakov’s Receipt of Purported Official U.S. Government Documents
In the summer of 2014, Buryakov met numerous times with a confidential source working for the FBI (CS-1). CS-1 posed as the representative of a wealthy investor looking to develop casinos in Russia. During the course of these meetings, and consistent with his interests as a Russian intelligence agent, Buryakov demonstrated his strong desire to obtain information about subjects far outside the scope of his work as a bank employee. During these meetings, Buryakov also accepted documents that CS-1 claimed he had obtained from a U.S. government agency and which purportedly contained information potentially useful to Russia, including information about U.S. sanctions against Russia. Time reports this information as being from Treasury, relating to sanctions.
Buryakov, 39, Sporyshev, 40, and Podobnyy, 27, are charged on two counts. The first count charges the defendants with participating in a conspiracy for Buryakov to act in the United States as an agent of a foreign government without first notifying the Attorney General, and carries a statutory maximum penalty of five years in prison. The second count charges Buryakov with acting in the United States as an agent of a foreign government without first notifying the Attorney General, and charges Sporyshev and Podobnyy with aiding and abetting that offense. The second count carries a statutory maximum penalty of 10 years in prison.
Bloomberg reports that New York-based S&P, the only credit rater sued by the Justice Department’s residential mortgage-backed securities working group, has alleged it was singled out because of its downgrade of U.S. debt in 2011, while its competitors, which issued the same grades for the same securities, weren’t sued by the U.S.
Bloomberg continued Standard & Poor’s is close to a settlement of about $1 billion with the U.S. for allegedly misleading investors about its ratings of mortgage-backed securities before the subprime crisis, a person familiar with the matter said.
Monday, January 26, 2015
Back in Warm San Diego from Snowing Amsterdam ! Each year the Amsterdam Centre for Tax Law (of the University of Amsterdam Law Faculty) organizes its Winter Course on International Tax Law for 25 selected applicants. The course this year was held between 21 - 27 January 2015 at the University of Amsterdam. The following week each year is the European Union Tax course.
Starting September 2015, University of Amsterdam will offer an LL.M. of International Taxation in English, limited to just 25 annual candidates from around the world. Applications for one of these seats are open until April.
This year's course theme is "Tax Treaty Application". The Winter Course on International Tax Law focused on the practical problems of tax treaty application. It brought the participants’ knowledge up-to-date with recent OECD developments, major issues on tax treaty interpretation, as well as relevant case-law on tax treaties around the world. BEPS and information exchange were major focal points of new compliance areas of 2015.
Prof. Dennis Weber, Director of the ACTL, assembled a leading program faculty including Prof. Peter Watel (UvA); Prof. Hein Vermeulen (UvA/PwC); Prof. Stef van Weeghel (UvA/PwC); Prof. Bruno De Silva (UvA); Prof. Otto Marres (UvA/KPMG); Prof. Joanna Wheeler(IBFD/UvA); Jasper Arendse (Directorate of International Affairs Dutch Ministry of Finance); Melinda Brown (OECD); and myself, Prof. William Byrnes.
My topic examined the protocols, mechanisms and expanding scope of information exchange via bilateral and multilateral agreements. FATCA, OECD CRS and Global Initiatives, EU Expanded Savings Directive EOI, TIEAs were discussed as part of this topic, as well as W8s / tax certification forms and validation, data collection, discernment and distribution.
The Amsterdam Centre for Tax Law (ACTL) is the tax law research centre of the University of Amsterdam. ACTL members conduct research into various subjects of tax law, with a strong emphasis on Corporate Taxation, International Tax Law and European Tax Law.
(Reuters) - A U.S. judge on Thursday threw out the guilty pleas of four men accused of illegally dealing in shares ahead of an IBM Corp acquisition, the first decision in response to a landmark 2nd Circuit appellate ruling curtailing prosecutors' ability to bring certain insider trading cases.
FINRA has released its 2015 regulatory priorities. A high priority is under the title "Putting customer interests first".
FINRA states that a central failing FINRA has observed is firms not putting customers’ interests first. The harm caused by this may be compounded when it involves vulnerable investors (e.g., senior investors) or a major liquidity or wealth event in an investor’s life (e.g., an inheritance or Individual Retirement Account rollover).
Poor advice and investments in these situations can have especially devastating and lasting consequences for the investor. Irrespective of whether a firm must meet a suitability or fiduciary standard, FINRA believes that firms best serve their customers—and reduce their regulatory risk—by putting customers’ interests first. This requires the firm to align its interests with those of its Fidcustomers.
Sunday, January 25, 2015
ADAM J. LEVITIN, Georgetown University Law Center
Banking is based on two fundamentally irreconcilable functions: safekeeping of deposits and relending of deposits. Safekeeping is meant to be a risk-free function, but using deposits to fund loans inevitably poses risk to deposits, thereby undermining the safekeeping function. The expensive, inefficient, and unreliable apparatus of bank regulation is an attempt to square the circle between safekeeping and lending: government liquidity and deposit insurance facilities, capital and reserve requirements, investment restrictions, and supervisory examinations are all aimed at keeping the risks of the lending function in check so as to ensure the safety of deposits.
This Article argues for splitting the lending function from the safekeeping function in both traditional and shadow banking markets through what it terms “Pure Reserve Banking.” In a Pure Reserve Banking regime, “safe banks” would offer safekeeping and payment services, and nothing else. Loans would be a function solely of capital markets, which would operate without government facilitation of shadow banking deposit substitutes. Historically, a separation between deposits and lending was not possible, but it is with today’s deep and efficient capital markets, which already provide the funding for much of the borrowing in the economy.
Splitting the lending function from the safekeeping function would protect the money supply from the market, and the market from the money supply. It would enable the government to end its massive support of both formal banking markets and shadow banking markets and thereby remove the moral hazard that encourages asset bubbles through overlending. At the same time, divorcing lending from safekeeping would instill greater market discipline on lending markets because lending institutions could be allowed to fail without endangering the money supply. Delinking deposits and lending would eliminate the root cause of financial market instability and enable truly safe banking that is not dependent upon an increasingly complex, politicized, and untenable regulatory system.
Saturday, January 24, 2015
Alison Bennet of Bloomberg Law reports that the IRS's 2015 versions of the two strealined procedures OVDP forms (Form 14653 and Form 14654) require taxpayers to "provide a “narrative statement of facts” explaining their failure to disclose their offshore assets, or the agency will consider the applications incomplete and the taxpayer won't get penalty relief."
The forms—Form 14653 (used by non-residents) and Form 14654 (used by US residents)—are for taxpayers to certify that their conduct was not willful, a prerequisite to qualifying for little to no penalties.
Friday, January 23, 2015
The Securities and Exchange Commission announced its 2015 Office of Compliance Inspections and Examinations’ (OCIE) priorities which focus on three areas: protecting retail investors, especially those saving for or in retirement; assessing market-wide risks; and using data analytics to identify signs of potential illegal activity.
The agency’s exam priorities list says its “various examination initiatives” affect investment advisors, broker-dealers and transfer agents and are broken down into three areas: protecting retail investors and those saving for retirement; addressing marketwide risks like cybersecurity; and using data analytics to identify illegal activity.
Frontline Compliance Services notes that because retail retirement accounts will be “priority No. 1” for the agency, SEC exams of advisors and brokers likely will “focus heavily on retirement assets, especially rollovers of plan assets.”
The SEC also says that it will focus on fees charged by dually-registered advisors, including wrap fees.
“Our examination program collects information for the Commission on a range of important trends, issues, and risks,” said SEC Chair Mary Jo White. “OCIE helps us to maintain a strong presence with SEC registrants and to make a positive impact for the benefit of investors and our markets.”
The 2015 examination priorities address issues across a variety of financial institutions, including investment advisers, investment companies, broker-dealers, transfer agents, clearing agencies, and national securities exchanges. Areas of examination include:
Retail Investors – Retail investors are being offered products and services that were formerly characterized as alternative or institutional, including private funds, illiquid investments, and structured products. Additionally, financial services firms are offering a broad array of information, advice, products, and services to help retail investors plan for and live in retirement. OCIE will assess risks to retail investors that can arise from these trends.
Market-Wide Risks – OCIE will examine for structural risks and trends that involve multiple firms or entire industries, including: monitoring large broker-dealers and asset managers in coordination with the SEC’s policy divisions, conducting annual examinations of clearing agencies as required by the Dodd-Frank Act, assessing cybersecurity controls across a range of industry participants, and examining broker-dealers’ compliance with best execution duties in routing equity order flow.
Data Analytics – Over the last several years, OCIE has made significant enhancements that enable exam staff to analyze large amounts of data efficiently and effectively. OCIE will use these capabilities to focus on registrants and registered representatives that appear to be potentially engaged in illegal activity.
Thursday, January 22, 2015
Last year, the Center on Wealth and Philanthropy at Boston College updated its frequently cited 55-year wealth transfer projection. Its new research estimated that $59 trillion would be transferred to the next generation between 2007 and 2061.
ThinkAdvisor reports that "Ultra-high net worth individuals around the world will transfer at least $16 trillion to the next generation over the next three decades, according to a report released Tuesday by Wealth-X and National Financial Partners, which provides benefits, insurance and wealth management."
Wednesday, January 21, 2015
Clients looking to wrap up a complete package of tax savings as the year draws to a close may be pleasantly surprised by a split-dollar lending strategy that takes advantage of both the tax preferences afforded to life insurance and today’s low interest rate environment.
For high-net-worth clients, this strategy can provide an effective method for transferring wealth while taking advantage of these dual benefits. The stakes can be high, however, and this often-overlooked strategy presents a minefield of potential pitfalls that must be carefully avoided in order to ensure that the client receives the full tax benefit of a split-dollar life insurance plan.
Read Think Advisor's perspective on the split-dollar lending strategy.
Department of Justice Seeks Recovery of Bribes of Honduran Official Used To Buy New Orleans Real Estate
The Department of Justice filed today a civil forfeiture complaint seeking the forfeiture of nine properties worth approximately $1,528,000 that were allegedly purchased with funds traceable to a $2 million bribe paid by a Honduran information-technology company to Mario Zelaya the former Executive Director of the Honduran Institute of Social Security. [See Yahoo story about the $330 million pilfered by Mario Zelaya from the treasury].
From 2010 to 2014, Dr. Mario Roberto Zelaya Rojas, 46, of Tegucigalpa, Honduras, served as the Executive Director of the Honduran Institute of Social Security (HISS), a Honduran Government agency that provides social security services, including workers’ compensation, retirement, maternity, and death benefits.
According to allegations in the forfeiture complaint, Zelaya solicited and accepted $2.08 million in bribes from Compania De Servicios Multiples, S. de R. L. (COSEM) in exchange for prioritizing and expediting payments owed to COSEM under a $19 million contract with HISS. Zelaya also allegedly instructed COSEM to make bribe payments to two members of the Board of Directors of HISS charged with overseeing the COSEM contract. To conceal the illicit payments, COSEM allegedly sent the bribes through its affiliate company, CA Technologies.
As further alleged in the complaint, the bribe proceeds were then laundered into the United States and used by Zelaya and his brother, Carlos Alberto Zelaya Rojas, to acquire real estate in the New Orleans area. Certain properties were titled in the name of companies nominally controlled by Zelaya’s brother in an effort to conceal the illicit source of the funds as well as the beneficial owner. The current action seeks forfeiture of nine properties acquired with the proceeds of Zelaya’s alleged bribery scheme.
Public comments disclosed by OECD for discussion draft on Action 10 (Low value-adding services) of the BEPS Action Plan
On November 3, 2014, the OECD invited comments from interested parties on the discussion draft of proposed modifications to Chapter VII of the Transfer Pricing Guidelines covering low value-adding intra-group services relating to Action 10 of the BEPS Action Plan. The OECD is grateful to the commentators for their input and now publishes the comments received.
» Download the comments received (PDF, 11MB)
The input will be discussed during a public consultation at the OECD Conference Centre on 19-20 March 2015. Registration details for the public consultation will be published on the OECD website shortly. Speakers and other participants at the public consultation will be selected from among those providing timely written comments on the discussion draft.
Tuesday, January 20, 2015
Interested parties were invited to comment on the discussion draft on Action 14 (Make dispute resolution mechanisms more effective) of the BEPS Action Plan. The OECD is now disclosing thoese comments received.
» Download the comments received (PDF, 6MB)
The input will be discussed during a public consultation at the OECD Conference Centre on 23 January 2015 from 09:30 to 18:00. Further details about this event are available on line:
Dimon warns that smaller banks may have less influence
The Financial Times (FT, £, p16, restricted access) reported that JP Morgan Chase’s chief executive has warned that breaking up US banks would make it harder for the West to compete with Chinese competitors.
The FT quoted Jamie Dimon: “America has been the leader in global capital markets for 50, 100 years. It’s part of the reason the country is so strong. I would not want the next JP Morgan Chase to be a Chinese company.”
Dimon is lobbying against the Federal Reserve's plan that JP Morgan Chase maintain greater capital because of its TBTF (to big to fail) size and complexity. JP Morgan Chase declared a record profit year.