J.P. Morgan Chief Executive Jamie Dimon wasn’t asked to testify before a Senate panel probing the $6 billion “London Whale” trading debacle, but that doesn’t mean he wasn’t one of the stars of the show.
The panel, through both its 300-page report released Thursday and the remarks of its committee members issued Friday, suggested Dimon had at least some knowledge of the losses when he dismissed early media reports detailing the matter, calling the charges a “complete tempest in a teapot.”
“When he made that statement, Mr. Dimon was already in possession of information about the complex and sizeable portfolio, its sustained losses for three straight months, the exponential increase in those losses during March, and the difficulty of exiting [those] positions,” according to the report.
Dimon also told the Senate subcommittee last year that he did not recall the Chief Investment Office’s change to a different risk model, one that cut the portfolio’s purported risk profile in half, making it look safer. Dimon said he only recalled becoming aware of the issue after “things blew up.”
As it turned out, Dimon did in fact send an email approving the new risk model, according to the report. “Jamie Dimon himself approved a temporary increase and, voila, the [risk] breach was gone,” said Senate panel chair Carl Levin, who accused J.P. Morgan executives of turning a “blind eye to the breaches.”
Considering the focus of the panel was often on Dimon, whose name was mentioned more than 300 times in the report, it’s surprising he wasn't called before a Congress for a third time.
J.P. Morgan increased its dividend by 27% after having its capital requirement plan approved by the Federal Reserve. With 5.78 million J.P. Morgan shares, Dimon is set to receive a windfall of $1.85 million.
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