Here’s why JPMorgan doesn’t seem concerned that a ship it owns was just seized with $1 billion of cocaine on board
A boat owned by JPMorgan was seized by US customs weeks after more than $1 billion worth of cocaine was found aboard. But the bank doesn’t seem to mind.
JPMorgan hasn’t yet felt inclined to publicly address its association with the vessel. The firm has also declined several requests for comment from Markets Insider.
Possible reasons why can be gleaned from a piece Wednesday by Bloomberg Opinion columnist Matt Levine. Here are four reasons why JPMorgan likely isn’t sweating too much:
1) JPMorgan owns the ship, not the drugs
“I’m sure JPMorgan was just a blind mule,” Levine’s wife, a federal criminal defense lawyer, told him. “Somebody else packed their ship for them.”
2) JPMorgan doesn’t even technically own the vessel — it just financed the purchase
The bank financed the purchase of the ship for the Mediterranean Shipping Company (MSC), a Swiss-based shipping firm.
“You should think of this not so much as ‘JPMorgan decided to buy a boat and then rented it out to MSC’ and more as ‘MSC decided to get the money to finance its boat from JPMorgan, and it made sense to structure that financing transaction as a lease rather than a loan,'” Levine wrote.
3) Since JPMorgan Asset Management is the party involved, the firm’s clients technically own the ship.
Since asset management, at its core, is defined as the management of assets on the behalf of others, this means JPMorgan itself doesn’t directly own the vessel.
4) JPMorgan presumably has an agreement with MSC that pushes responsibility onto them
“If JPMorgan is just providing financing for the ship, if it’s not controlling and operating it and taking the profits of those operations, then presumably it has some contractual provisions requiring MSC not to do anything to recklessly lose JPMorgan’s $90 million ship — some provision putting at least some of the risk of MSC’s operations on MSC,” Levine said.
Source: Business Insider