by Christopher Freeburn | March 15, 2013 9:36 am
Two government reports issued on Thursday raised questions about the management one of the nation’s largest banks.
The conduct of JPMorgan Chase (NYSE:JPM) executives during last year’s London Whale trading scandal was blasted in a report from the U.S. Senate’s Permanent Subcommittee on Investigations. The report sharply criticized bank CEO James Dimon, alleging that he failed to disclose the full impact of the losses to regulators, the Washington Post noted.
JPMorgan Chase ultimately admitted losses totaling $6.2 billion from derivatives trades made by a single rogue trader at its London office. The Senate committee concluded that the bank overlooked warning signs that could have prevented the losses and didn’t notify regulators about the losses for three months. Even after alerting regulators, the bank did not provide complete information about the trades and senior executives reportedly berated investigators who were examining its records.
Adding to JPMorgan’s woes, the Federal Reserve also announced on Thursday that it had discovered “weaknesses” in the bank’s capital plans. While JPMorgan passed the Fed’s “stress tests,” the government said its plans to return profits to shareholders from capital reserves had problems sufficient to “require immediate attention.” The Fed said it had found a similar problem with Goldman Sachs’ (NYSE:GS) capital plan.
Shares of JPMorgan fell about 2% in Friday morning trading.
Source URL: http://investorplace.com/2013/03/jpmorgan-ceo-withheld-info-about-6-billion-trading-loss/
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