by InvestorPlace Staff | May 14, 2012 12:29 pm
The first, but in all likelihood not the last, casualty of the JPMorgan (NYSE:JPM) debacle is 30-year JPM veteran Ina Drew, who the bank announced will retire from the company.
Drew, one of the highest paid and most influential women on Wall Street, announced her retirement from JPMorgan after last week’s acknowledgement of a $2 billion, and possibly still counting, loss on derivatives trades designed to hedge the company’s portfolio of bonds.
Drew was the head of risk management for the bank’s Chief Investment Office (CIO) which is based on London. Two of Drew’s closest employees, London-based Achilles Macris, a managing director, and Javier Martin-Artajo, who heads up the CIO trading desk, are also expected to leave according to Reuters.
The CIO office used a series of instruments that became unwieldy, complicated, and difficult to both turn around and unwind as part of a strategy to protect the bank against a portfolio of bonds. The CIO group runs separately from any other proprietary trading desks, with all activity reporting directly to New York.
The $2 billion loss is a major blow for JPMorgan, and an embarrassment for CEO James Dimon, one of the most well respected bankers in the U.S. While the loss is not expected to have a material impact on the company’s results, Dimon has been up front in his opinions regarding banking laws and regulations, favoring a more lenient position for banks.
Matt Zames, currently co-head of global fixed income in the company’s investment bank, will succeed Drew, and Mike Cavanagh, the company’s former chief financial officer, will coordinate the bank’s overall response.
JPM was down 2% to $36 as of this writing, with other banking stocks Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) similarly down 2% or more.
This article was written by Marc Bastow, Assistant Editor at InvestorPlace.com. As of this writing he did hold a position in any of the aforementioned securities.
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