Pressure mounts on JPMorgan chief
Report claims bank withheld key information from regulator
JPMorgan Chase’s efforts to hide trading losses, outlined in a senate report yesterday, probably will ignite debate over whether the largest US bank is too big to manage and ratchet up pressure on chief executive Jamie Dimon to surrender his role as chairman.
Mr Dimon misled investors and dodged regulators as losses escalated on a “monstrous” derivatives bet, according to a 301-page report by the senate permanent subcommittee on investigations.
The bank “mischaracterised high-risk trading as hedging”, and withheld key information from its primary regulator, sometimes at Mr Dimon’s behest, investigators found. Managers manipulated risk models and pressured traders to overvalue their positions in an effort to hide growing losses.
After nine months of investigation, the panel concluded that JPMorgan had “a trading operation that piled on risk, ignored limits on risk taking, hid losses, dodged oversight and misinformed the public,” chairman Carl Levin, a Michigan Democrat, told reporters yesterday.
JPMorgan lost more than $6.2 billion over nine months last year in a derivatives bet.