Senate report slams JPMorgan for risky trades
Investigators blast the bank for misleading regulators and investors in $6.2-billion ‘London Whale’ trading fiasco. Federal regulator is criticized for failing to detect the high-risk deals.
From Los Angeles Times
By Jim Puzzanghera and Andrew Tangel
March 14, 2013
WASHINGTON — In a scathing report, Senate investigators said JPMorgan Chase & Co.’s huge trading losses last year were caused by high-risk market bets that bank executives failed to catch despite numerous red flags.
The 307-page, bipartisan report released Thursday said the bank tried to hide the $6.2 billion of losses in the so-called London Whale trades from regulators and the public. The report went on to criticize JPMorgan’s federal regulator, the Office of the Comptroller of the Currency, for failing to discover and properly investigate the trades.
The risky bets on complex financial instruments damaged the well-honed image of JPMorgan, the nation’s largest bank, and its chief executive, Jamie Dimon…
Mark Williams, a Boston University finance professor, said JPMorgan’s trades were similar to risky bets made before the 2008 financial crisis.
“If they’re not being honest with their regulators, who else are they not being honest with?” said Williams, a former Federal Reserve regulator.
Read the full article at LATimes.com.