May 01, 2023

Mon 5/1 - Exit First Republic, Enter JPMorgan, Energizer and Walmart Battery Antitrust, DeSantis vs. Prosecutor, Alito Knows Leaker and Trump Wants Mistrial

5 minutes

JPMorgan Chase & Co has agreed to acquire First Republic Bank in a government-led deal after it was seized by regulators. The transaction will see the acquisition of around $173bn of First Republic’s loans, $30bn of securities and $92bn in deposits. The deal makes JPMorgan even larger, and critics have said it will likely lead to consolidation in the financial industry. The transaction is expected to generate more than $500m of incremental net income a year.

JPMorgan's acquisition will increase its size, which goes against the government's efforts to prevent further consolidation in the financial industry. Due to US regulatory restrictions, JPMorgan would not be able to expand its deposit base under normal circumstances. The acquisition will result in a one-time gain of $2.6 billion for JPMorgan, but it will also make a payment of $10.6 billion to the FDIC and incur $2 billion in related restructuring costs over the next 18 months.

Functionally, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours. All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank and will have full access to all of their deposits.

JPMorgan First Republic Deal Ends Second-Biggest US Bank Failure

Energizer and Walmart are facing three proposed class actions accusing them of conspiring to raise disposable battery prices by inflating wholesale prices for other retailers and requiring those retailers not to undercut Walmart on price. Energizer had been trying to recover sales lost in 2013 when Walmart ended its exclusive battery contract with the retailer's Sam's Club unit. The lawsuits seek unspecified compensatory and triple damages under federal and state antitrust laws and various state consumer protection laws. They also seek injunctions to block Energizer from tying battery sales to pricing and require Energizer and Walmart to "dissipate" the effects of their anticompetitive conduct.

Energizer, Walmart sued for conspiring to raise battery prices | Reuters

Florida Governor Ron DeSantis' legal battle with suspended state attorney Andrew Warren, who refused to enforce anti-abortion laws, highlights the increasing scrutiny against prosecutors over cases they decline to bring. Warren's lawsuit against DeSantis argues the Republican governor violated his First Amendment rights by suspending him for political speech and related conduct. The lawsuit is set for oral arguments before the US Court of Appeals for the Eleventh Circuit on May 2. Similar tensions between prosecutors and state officials are playing out across the country, driven by a range of issues beyond just abortion restrictions.

DeSantis, Suspended Prosecutor Spotlight Bigger Discretion Fight

Justice Samuel Alito has said he believes he knows who leaked his draft opinion last year, which indicated the Supreme Court would roll back abortion rights, but lacks the proof to name them. Alito stated that the leaker was part of a campaign to intimidate the court and prevent the Dobbs draft from becoming the decision of the court. In January, following an investigation, the Supreme Court was unable to conclusively identify who leaked the unpublished draft. The leak had caused protests, and Alito had claimed that it endangered the lives of justices by putting a target on their backs.

Alito says he has ‘pretty good idea’ who leaked abortion draft

Three whistleblowers who exposed a $1 billion insurance fraud and helped secure a settlement in a bankruptcy court are not entitled to any of that money, according to a Securities and Exchange Commission (SEC) decision being challenged in two federal lawsuits. Although the whistleblowers worked with the SEC for years and provided information that “significantly contributed” to the successful sanctioning of a Texas viatical company, the money was recovered through a bankruptcy proceeding. Therefore, according to the law, the whistleblowers cannot be paid, the commission ruled. One of the whistleblowers, John Barr, was the SEC’s lead witness in court when it successfully petitioned a federal court judge to install the agency’s own choice to become bankruptcy trustee. There was actually a House bill in 2021 that would have permitted bankruptcy recoveries, but it died without being brought to the floor.

Whistleblowers Who Exposed $1 Billion Fraud Denied SEC Windfall

Former US President Donald Trump has requested a mistrial in a civil case where writer E. Jean Carroll has accused him of rape and defamation. Trump's lawyer accused US District Judge Lewis Kaplan of being biased against him and of making "unfair and prejudicial" rulings. Carroll's defamation claim concerns an October 2022 post on Trump's Truth Social platform, where Trump called Carroll's case a "complete con job" and "a Hoax and a lie." If the mistrial is not granted, Trump's lawyer has requested that Kaplan correct the record and give him more freedom to cross-examine Carroll and her witnesses.

Donald Trump requests mistrial in rape accuser Carroll's civil case | Reuters

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