JPMorgan Chase thought it had $1.3 million worth of nickel stored in a warehouse. A closer examination revealed bags of stones.
Story by lvaranasi@insider.com (Lakshmi Varanasi) • Monday
Story by lvaranasi@insider.com (Lakshmi Varanasi) • Monday
Turns out that JPMorgan's bags of nickel are actually bags of stones. Roman Mykhalchuk/Getty Images© Roman Mykhalchuk/Getty Images- JPMorgan Chase kept bags of stones in a warehouse thinking they were nickel, according to the WSJ.
- The London Metal Exchange revealed Friday that the bags contained stones instead of nickel.
- The owner of the bags is JPMorgan Chase, according to the Journal.
An operator for the warehouse weighed bags that were thought to contain 54 metric tons of nickel, only to find that they were filled with stones, according to The Wall Street Journal.
It appears that JPMorgan Chase is the unlucky owner of those bags, the Journal said on Monday, citing people familiar with the matter.
Had they contained nickel, the bags would have been worth $1.3 million at current prices, representing 0.14% of nickel inventories, Bloomberg reported. While that means the mix-up will have a relatively minor impact on metal markets, it does call the security of the LME's contracts into question. "In an industry riddled with scandals, the LME's contracts are viewed as unquestionably safe," Bloomberg said.
[img aria-hidden="true" width="2965" height="2224" quality="75" attribution="REUTERS/Mario Anzuoni" title="A fugitive billionaire just auctioned off $3.2 million worth of luxury handbags — see highlights from his prized collection" caption="- Billionaire Joseph Lau sold $3.2 million worth of luxury handbags at a Sotheby's auction.
- The Hong Kong mogul has been a fugitive since 2014, when he was convicted of bribery and money laundering.
- Lau is a prolific collector who's purchased roughly 1,500 Hermès bags, Bloomberg reported.
The auction, hosted by Sotheby's, included 77 handbags from the collection of Joseph Lau, a property developer worth roughly $6 billion,
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1 of 7 Photos in Gallery©REUTERS/Mario Anzuoni
A fugitive billionaire just auctioned off $3.2 million worth of luxury handbags — see highlights from his prized collection- Billionaire Joseph Lau sold $3.2 million worth of luxury handbags at a Sotheby's auction.
- The Hong Kong mogul has been a fugitive since 2014, when he was convicted of bribery and money laundering.
- Lau is a prolific collector who's purchased roughly 1,500 Hermès bags, Bloomberg reported.
The auction, hosted by Sotheby's, included 77 handbags from the collection of Joseph Lau, a property developer worth roughly $6 billion, according to Bloomberg's Billionaires Index. Titled "the Visionary Collection of Joseph Lau," the auction was part one of a two-part event, the second of which will take place in July, according to Sotheby's.
The collection included one Chanel bag and 76 Hermès bags, including both the iconic Birkin and Kelly styles. The highest bid went to a "Bleu Jean" crocodile Birkin bag produced in 2006, which features 18K white gold and diamond hardware — the bag sold for 1.52 million HKD, or about $194,000, according to Sotheby's website.
Other top sellers included a rose mini Kelly bag and another blue crocodile Birkin, both of which sold for 1,206,500 Hong Kong dollars, or about $154,000.
Collections of luxury handbags like Lau's could be a smart investment, as their volatility is low and returns could reach mid-single-digits, according to a 2022 Credit Suisse study.
And Lau is a prolific handbag collector: He's purchased over 1,500 Hermès bags as gifts over the years, and his family still owns more than 1,000, a representative for Lau told Bloomberg. Lau's collection includes several bags designed by legendary designer Jean-Paul Gaultier, who served as creative director for Hermès from 2004 to 2010. The bags produced during Gaultier's tenure are "highly coveted," according to Sotheby's.
Lau's collection extends beyond handbags to diamonds — including a $53 million 12-carat blue diamond — and art by Andy Warhol and Jean-Michel Basquiat, Bloomberg reported.
In 2014, Lau was convicted of money laundering and bribery by a Macau court and sentenced to five years in prison, but he's avoided serving time by avoiding travel to the island, which doesn't have an extradition pact with Hong Kong. Lau has auctioned off other pieces in his collection over the years, including $20 million worth of art and fine wine.
Take a look at some of the top sellers from Lau's most recent auction:
The LME first announced the mix-up last Friday but didn't disclose the owner of the bags or the warehouse where they were kept, according to The Wall Street Journal. However, people familiar with the matter said the warehouse was owned and operated by Access World, according to the Journal.
A spokesperson for the logistics firms told Insider that "Access World confirms it is currently undertaking inspections of warranted bags of nickel briquettes at all locations and will engage external surveyors to assist. In the meantime based on internal stock checks all information indicates that the underlying issue which led to the suspension of the 9 warrants referenced in LME notice 23/044 is an isolated case and specific to one warehouse in Rotterdam."
It's likely that Access World is going to bear the financial burden for the mix-up rather than JPMorgan Chase, the Journal said, because it was the company's responsibility to protect the stores of metal in its facilities.
JPMorgan Chase bought the bags years ago and remains an active player in big metals, the Journal said.
JPMorgan Chase and the LME also did not immediately respond to Insider's request for comment.
