JP Morgan Chase chief Jamie Dimon hid information: US Senate report
15 Mar 2013
The largest US bank JP Morgan Chase failed to heed internal controls and manipulated documents racking up trading losses last year, even as its influential chief executive, Jamie Dimon, kept some information from regulators, according to a new Senate report.
The Congressional investigators' findings present multibillion-dollar trading blunder in new light. The blunder had claimed the jobs of several top executives prompting an inquiry by the Federal Bureau of Investigation.
According to commentators, the 300-page report, released a day ahead of the Senate subcommittee planning to question bank executives and regulators at a hearing, would escalate the debate over how to police complex risk-taking on Wall Street.
It might also led to the filing of a criminal case against employees at the centre of the troubled wager.
A spokeswoman for the bank said today, while the bank had repeatedly acknowledged significant mistakes, its senior management acted in good faith and never had any intent to mislead anyone.
Dimon, whose reputation as an astute manager of risk had suffered from the trading losses, came for harsh criticism from the Senate investigators. The chief executive agreed to changes to an internal alarm system that underestimated losses, which seemed to contradict his earlier statements to lawmakers, the report said.
He also stood accused of withholding details regarding the investment bank's daily losses from regulators, and then raising ''his voice in anger'' at a deputy who later turned over the information.
Further in another blow to the lender the Federal Reserve unexpectedly said it had found a ''weakness'' in the capital plans of the bank.
The twin announcements, which both came in the late afternoon yesterday, led to an escalation of the problems for JPMorgan, the nation's largest bank and arguably its most prestigious.
The report from the Senate's Permanent Subcommittee on Investigations, has plans for holding a hearing today to probe the behaviour of current and former senior bank executives as they tried to mount a damage control operation from toxic trades, initiated by a trader known as the ''London Whale.''
The bank took a hit of about $6.2 billion from the trades.
The Senate report came as the first to suggest that JPMorgan's chief executive Jamie Dimon was not forthright with regulators after learning of the mounting losses.
