by Christopher Freeburn | July 11, 2012 1:11 pm
JPMorgan Chase (NYSE:JPM) executives who were at the center of the bank’s embarrassing credit derivatives losses may soon find themselves having to return millions in compensation.
The bank is reportedly preparing to claw back money paid to top executives who oversaw the company’s Chief Investment Office, where the bad trades were made, according to a report in TheWall Street Journal. An announcement of the clawbacks could come by the end of this week, though sources indicated that the bank continues to calculate the specific amounts of compensation it will seek to reclaim.
Originally stated at $2 billion, the bank is also expected to announce that the trading losses will cost the company $5 billion during the second quarter and less than $1 billion in future quarters. The trades that produced the losses have been almost completely closed.
Among those hit hardest by the clawbacks would be former CIO head Ina Drew, who stepped down and left the firm after word of the losses became public.
While rumors that Drew would face clawbacks first surfaced last month, more JPMorgan executives are said to be involved this time, including London-based trader Bruno Iksil, as well as Achilles Macris and Javier Martin-Artajo, his supervisors.
With the clawbacks, JPMorgan may be hoping to blunt public and political criticism of the trading debacle, which prompted regulators to question the bank’s internal controls and put CEO Jamie Dimon on the hot seat in front of Congress.
Shares of JPMorgan Chase rose just over 1% in Wednesday afternoon trading.
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