Tag Archives: Bad Faith

Judge Rakoff Nails JP Morgan

Michael Collins

Federal district court Judge Jed S.  Rakoff called off a J.P. Morgan deal in an order that revealed the inside track on how the financial giant does business. The ruling of January 28 prevents Morgan from selling or participating the $225 million loan it made to Cablevisión, owned in the majority by Grupo Televisa, one of Mexico’s largest telecommunications companies.  (Image)

Cablevisión used the loan to purchase a Empresas Bastel which operated a major fiber optic network throughout Mexico. While it was no secret that Morgan would sell the loan to other investors, Judge Rakoff found that Cablevisión, and its majority shareholder Televisa, had no intention of allowing it’s biggest competitor to control 90% of loan.

Cablevisión sued Morgan after it discovered that the firm had crafted a loan sales agreement that allowed the Morgan-selected investor, Banco Inbursa, S.A. (Inbursa), to gain virtually all of Cablevisión’s business secrets in return for purchasing the loan. Banco Inbursa is owned by Carlos Slim, the Mexican investor who also owns Telemex, Mexico’s largest telephone, fiber optic, and internet provider. The Slim companies are Cablevisión’s largest competitor for the very business the Morgan loan was used to purchase, a Mexican business and consumer fiber optic network.
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The NYT, a Mexican Billionaire, and JP Morgan Chase

This is a scandalous story, involving one of the world’s largest banks, a powerful federal judge, and two Mexican telecom giants. Under any other circumstances, the business section of the Times would be expected to cover it, as the Journal and Bloomberg have. Yet as of Saturday midday, I cannot find a single mention of any aspect of this case, anywhere in the physical New York Times

The Story the New York Times Won’t Touch

By James Ledbetter

February 20, 2010      The Big Money

A little more than a year ago, when the Mexican billionaire Carlos Slim increased his stake in the New York Times Company (NYT), I wrote “I pity the Times Mexico bureau chief who has to tiptoe through who is and isn’t out of favor with the paper’s new sugar daddy.” Now we have a very clear example of how the Times treats Slim within its pages; it’s not pretty, and the journalistic compromise can be seen well beyond Mexico.

For the last several days, bloggers and many business news outlets have been revealing truly astounding details from a court case involving J.P. Morgan Chase (JPM) and two large Mexican telecom companies, one of which is Slim’s. Blogger Felix Salmon at Reuters was one of the earliest to cover this at length; his summary of the case gets right to the heart of it:

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