Tue June 12, 2012
JPMorgan Knew Of Risks, 'WSJ' Reports
"Some top JPMorgan Chase executives and directors were alerted to risky practices by a team of London-based traders two years before that group's botched bets cost the bank more than $2 billion," The Wall Street Journal is reporting.
The Journal says it reached that conclusion after "interviews with more than a dozen current and former members of the bank's Chief Investment Office, the unit responsible for the losses."
And it adds that "last year, top CIO executives set a plan to roll back a separate set of large London trades — only to learn later that the plan hadn't been followed correctly."
This news comes one day before JPMorgan CEO Jamie Dimon is due before the Senate Banking Committee, which has scheduled a hearing on "A Breakdown in Risk Management: What Went Wrong at JPMorgan Chase?"
As we've previously reported, the banks losses on the bets were initially estimated at $2 billion — but have been growing.
Monday, Reuters columnist David Cay Johnston looked at JPMorgan's experiment with "hedginess" — a play on Stephen Colbert's truthiness.