JPMorgan Chase and Goldman Sachs Group are being pressed to hand over extensive information on clients trading Russian debt, as U.S. Sen. Elizabeth Warren and Rep. Katie Porter expand efforts to pry into whether Wall Street is profiting on the invasion of Ukraine.
The Democrats sent JPMorgan Chief Executive Jamie Dimon and Goldman CEO David Solomon letters Tuesday demanding lists of clients betting on Russian government and corporate debt since the war broke out in February, as well as the types and sizes of wagers and any gains. The lawmakers also want information on the banks themselves, including tallies of any trades they’ve handled and revenue generated.
“We are seeking information on how your dealings could benefit Putin’s regime and how your institution may be profiting off of Russia’s invasion of Ukraine,” the lawmakers wrote to both CEOs.
Trading in Russian debt has become a hot-button topic — and the demands for information threaten to widen the spotlight from banks arranging transactions to potentially numerable hedge funds and other investors who’ve waded back into the market. The invasion of Ukraine initially sent prices of Russia-linked bonds tumbling, even if they weren’t subject to international sanctions. Some in the industry have since adopted differing views over whether to take advantage of the buying opportunity.
JPMorgan and Goldman have said they are pulling back from Russia in response to the country’s invasion of Ukraine. In announcing those moves, both New York-based firms said they would focus on supporting clients in managing or closing out pre-existing obligations. Representatives from JPMorgan and Goldman Sachs declined to comment.
Warren, an influential member of the Senate Banking Committee, began focusing on how banks were handling Russian-linked securities shortly after the invasion began.
In early March, she tore into JPMorgan and Goldman after Bloomberg News
“This maneuvering is legal under the sanctions put forward by the US Treasury because trading in the secondary markets is not prohibited so long as counterparties to the transactions are not sanctioned entities, and so long as the Russian sovereign debt being traded was issued prior to March 1,” they wrote to both banks. “However, it may undermine the work of the US Treasury and the international community seeking to hold Putin to account.”
Warren and Porter also asked the banks to describe how they’re ensuring that trades comply with US sanctions.
Dimon wrote in his annual shareholder letter in April that his firm is working closely with governments to implement sanctions and other directives. “Of course,” he said, “we are following both the letter of the law and the spirit of all the American and allied sanctions.”
— With assistance from Sridhar Natarajan.
