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PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019-6064 UNIT 3601 FORTUNE PLAZA OFFICE TOWER A NO 7 DONG SANHUAN ZHONGLU CHAO YANG DISTRICT TELEPHONE 12121 373 3000 BEIJING 100020 PEOPLE 5 REPUBLIC OF CHINA LLOYD K GARRISON RANDOLPH E SIMON H LOUIS S PAUL RIFKIND WEISS JOHN F WHARTON ( 1946-1991 l TELEPHONE 186 101 5828 6300 (1946-1956! \1950 1995) 12TH FLOOR It 927-19501 HONG KONG CLUB BUILDING 3A CHATER ROAD 11927 19771 CENTRAL HONG KONG TELEPHONE t852J 2846 0300 ALDER CASTLE 10 NOBLE STREET WRITER 5 DIRECT DIAL NUMBER LONDON EC2V 7JU U K TELEPHONE 144 201 7367 1600 212 373-3204 FUKOKU SEIMEI BUILDING WRITER'S DIRECT FACSIMILE 2-2 UCHISAIWAICHO 2-CHOME CHIYODA KU 212 492-0204 TOKYO 100 0011 JAPAN TELEPHONE 181-313597-8101 WRITER'S DIRECT E-MAIL ADDRESS egoldstein@paulweiss.com 200 I K STREET NW WASHINGTON DC 20006-1047 IELEPHONE <2021 223 7300 500 DELAWARE AVENUE SUITE 200 POST OFFICE BOX 32 WILMINGTON DE 19899 0032 TELEPHONE': 1302! 655 4410 December 8, 2010 MATTHEW W ABBOTT ALLAN J ARFFA ROBERT A ATKINS JOHN F BAUGHMAN LYNN B BAYARD DANIEL J BELLER CRAIG A BENSON* MITCHELL L BERG MARKS BERGMAN BRUCE BIRENBOIM H CHRISTOPHER BOEHNING ANGELO BONVJNO HENK BRANDS JAMES L BROCHIN RICHARD J BRONSTEIN DAVID W BROWN SUSANNA M BUERGEL PATRICK S CAMPBELL* JEANETTE K CHAN YVONNE Y F CHAN LEWIS R CLAYTON JAY COHEN KELLEY A CORN ISH CHARLES E DAVIDOW DOUGLAS R DAVIS THOMAS V DE LA BASTIDE Ill ARIEL J DECKELBAUM JAMES M DUBIN ALICE BELISLE EATON ANDREW J EHRLICH LESLIE GORDON FAGEN MARC FALCONE ANDREW C FINCH ROBERTO FINZI PETER E FISCH ROBERT C FLEDER MARTIN FLUMENBAUM ANDREW J FOLEY HARRIS B FREIDUS MANUEL S FREY KENNETH A GALLO MICHAEL E GERTZMAN PAUL 0 GINSBERG ROBERT D GOLDBAUM ERIC 5 GOLDSTEIN ERIC GOODISON CHARLES H GOOGE JR ANDREW G GORDON BRUCE A GUTENPLAN GAINES GWATHMEY, Ill ALAN S HALPERIN CLAUDIA HAMMERMAN GERARD E HARPER BRIAN S HERMANN ROBERT M HIRSH MICHELE HIRSHMAN JOYCE S HUANG DAVIDS HUNTINGTON MEREDITH J KANE ROBERTA A KAPLAN BRADS KARP JOHN C KENNEDY ALAN W KORNBERG DANIEL J KRAMER DAVID K LAKHDHIR STEPHEN P LAMB" JOHN E LANGE DANIEL J LEFFELL XIAOYU GREG LIU JEFFREY D MARELL MARCO V MASOTTI EDWIN S MAYNARD DAVID W MAYO ELIZABETH R McCOLM MARK F MENDELSOHN TOBY S MYERSON JOHN E NATHAN CATHERINE NYARADY ALEX YOUNG K OH JOHN J O'NEIL KELLEY D PARKER ROBERT P PARKER* MARC E PERLMUTTER MARK F POMERANTZ VALERIE E RADWANER CAREY R RAMOS CARLL REISNER WALTER G RICCIARDI WALTER RIEMAN RICHARD A ROSEN ANDREW N ROSENBERG PETERJ ROTHENBERG JACQUELINE P RUBIN RAPHAEL M RUSSO JEFFREY D SAFERSTEIN JEFFREY 8 SAMUELS DALE M SARRO TERRY E SCHIMEK KENNETH M SCHNEIDER ROBERT B SCHUMER JAMES H SCHWAB SiEPHEN J SHIMSHAK DAVID R SICULAR MOSES SILVERMAN SiEVEN SIMKIN JOSEPH J SIMONS MARILYN SOBEL TARUN M STEWART ERIC ALAN STONE AIDAN SYNNOTT ROBYN F TARNOFSKY JUDITH R THOYER DANIEL J TOAL MARK A UNDERBERG LIZA M VELAZQUEZ LAWRENCE G WEE THEODORE V WELLS JR BETH A WILKINSON STEVEN J WILLIAMS LAWRENCE I WITDORCHJC JULIA T M WOOD JORDAN E YARETT KAYE N YOSHINO TONG YU TRACEY A ZACCONE T ROBERT ZOCHOWSKI JR *NOT ADMITTED TO THE NEW YORK BAR By Email Gary J. Cohen, Esq. General Counsel Financial Crisis Inquiry Commission 1717 Pennsylvania A venue, NW Suite 800 Washington, DC 20006-4614 Re: Commission Letter to Robert Upton re: Potential Use of Quote Dear Gary: On behalf of JPMorgan Chase & Co. and Robert Upton, in response to the Commission's December 3, 2010 letter to Mr. Upton, we write jointly to object to the Commission's use oftwo purported quotes from Mr. Upton's interview with Commission staff (the "Interview"). As the Commission is aware, there was no tape-recording made of the Interview, and we therefore cannot confirm with certainty the accuracy of any statements attributed to the witness. Indeed, the Commission's Memorandum of Mr. Upton's Interview is inaccurate in a number of significant respects, as we have previously noted in correspondence with the Commission. Moreover, the Commission's letter provides no information regarding how it may use the quotes in its Report. Without necessary context, the quotes are misleading. Confidential Treatment Requested by JPMorgan PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Gary 1. Cohen, Esq. Specifically, the first statement listed in the Commission's letter docs not specify which "activities" Mr. Upton may have refetTed to as "window dressing." Mr. Upton made clear at his Interview that his use of the term "window dressing" referred to the standard practice of managing a financial institution's balance sheet down at quarterend to reduce leverage and verify liquidity, and that Bear Steams effected this objective by reducing holdings of highly liquid govemment securities and decreasing its reverse repo financing. Notably, Mr. Upton explained that Bear Steams provided detailed disclosures regarding these activities to the Securities and Exchange Commission, as well as in its public filings, which he summarized for Commission staff during his Interview. He also stated that the ratings agencies fully understood this practice because it was clearly detailed in Bear Steams' financial disclosures, which the ratings agencies reviewed, and also because the agencies often requested infonnation about what the firm's leverage had been intra-quarter. The second statement listed in the Commission's letter does not state the time frame in which Mr. Upton allegedly spoke with ratings agencies, does not indicate the nature ofthe requested "forbearance," and inaccurately implies that Mr. Upton requested forbearance from several ratings agencies. However, according to the Commission's own Memorandum, Mr. Upton stated that he spoke with four ratings agencies during the early August 2007 time period. He further explained that three of the four ratings agencies were not contemplating a ratings action with respect to Bear Steams; that he asked the fourth agency for forbearance pending additional information gathering and disclosure per that agency's request; and that that single ratings agency ultimately determined to lower its outlook on Bear Steams. Accordingly, we object to any use of the alleged statements by Mr. Upton in the Commission's Report. To the extent the Commission nevertheless chooses to include or paraphrase the statements in its Report, we object to their use in a manner that omits the context necessary to ensure the statements arc not misleading. Thank you for your attention to this matter. Eric S. Goldstein Attorneys for JPMorgan Catherine L. Redlich Driscoll & Redlich 521 Fifth Avenue, Suite 3300 New York, New York I 0175 Attorneys for Roher! Upton Confidential Treatment Requested by JPMorgan
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