Excerpt
JPMorgan Chase, the nation’s biggest bank, ignored internal controls and manipulated documents as it racked up trading losses last year, while its influential chief executive, Jamie Dimon, briefly withheld some information from regulators, a new Senate report says.
The findings by the Congressional investigators shed new light on the multibillion-dollar trading blunder, which has claimed the jobs of several top executives and prompted an inquiry by the Federal Bureau of Investigation. The 300-page report, released a day before a Senate subcommittee plans to question bank executives and regulators at a hearing, will escalate the debate over how to police complex risk-taking on Wall Street. It may also foreshadow a criminal case against employees at the heart of the troubled wager.
A spokeswoman for the bank said on Thursday, “While we have repeatedly acknowledged significant mistakes, our senior management acted in good faith and never had any intent to mislead anyone.”
Mr. Dimon, whose reputation as an astute manager of risk has been undercut by the trading losses, comes under the harshest criticism yet from the Senate investigators. The chief executive signed off on changes to an internal alarm system that underestimated losses, seemingly contradicting his earlier statements to lawmakers, according to the report.
He is also accused of withholding from regulators details about the investment bank’s daily losses — and then raising “his voice in anger” at a deputy who later turned over the information.
While people close to the matter dispute whether the outburst actually happened, it illustrates a broader problem at JPMorgan: after emerging from the financial crisis in far better shape than rivals, the bank saw itself as being above its regulators. The bank was so filled with hubris, Senate investigators said, that an executive once screamed at examiners and called them “stupid.”
The bipartisan report, citing some of the same private documents that F.B.I. agents are now poring over, also highlighted how JPMorgan managers “pressured” traders to lowball losses by $660 million, a previously undisclosed figure, and then played down the problems to authorities.
The bank’s trader who became known as the London Whale — because of the outsize derivatives trades at the center of the bank’s losses, which now total more than $6 billion — told a colleague last year that the bank’s estimated losses were “getting idiotic,” according to a transcript of their phone conversation cited by the subcommittee. The trader, Bruno Iksil, added that “I can’t keep this going” and that he didn’t know where his boss in London “wants to stop.”
"Former JP Morgan Executive Deflects Blame for Billion Dollar Mistake" PBS Newshour 3/15/2013
Excerpt
SUMMARY: Ina Drew, the former J.P. Morgan Chase executive who resigned after that bank made a billion dollar trading error, faced a Senate hearing Friday, where she testified she had been a diligent manager but had been lied to by subordinates. Ray Suarez talks with Bloomberg News' Dawn Kopecki who attended the hearing.
No comments:
Post a Comment