JPMorgan Chase CEO Jamie Dimon enter the company’s headquarters in New York Friday, July 13, 2012. JPMorgan Chase, the largest bank in the United States, said Friday that its loss from a highly publicized trading blunder had grown to $4.4 billion in the most recent quarter, more than double the bank’s original estimate of $2 billion. (AP Photo/Jin Lee)
NEW YORK (AP) — JPMorgan Chase said Friday that its traders may have tried to conceal the losses from a soured bet that has embarrassed the bank and cost it almost $6 billion — far more than its CEO first suggested.
The bank said an internal investigation had uncovered evidence that led executives to “question the integrity” of the values, or marks, that traders assigned to their trades.
JPMorgan also said that it planned to revoke two years’ worth of pay from some of the senior managers involved in the bad bet, and that it had closed the division of the bank responsible for the mistake.
“This has shaken our company to the core,” CEO Jamie Dimon said.
The bank said the loss, which Dimon estimated at $2 billion when he disclosed it in May, had grown to $5.8 billion, and could grow larger than $7 billion if financial markets deteriorate severely.
Dimon said the worst appeared to be behind the bank, and investors seemed to agree: They sent JPMorgan stock up 6 percent, making it the best performer in the Dow Jones industrial average.
Daniel Alpert, a founding managing partner with the New York investment bank Westwood Capital Partners LLC, said the bank and Dimon appeared to have learned from the crisis.
He said Dimon now realizes how complex and difficult to manage the bank is, will be more diligent in the future and probably won’t be the crusader he has been against some proposed financial regulation.
“Did it cost shareholders a few bucks? Yup,” he said. “But it was a non-horrible way of learning the lesson, in the sense that the entire institution didn’t burn down, the lesson’s been taught and Dimon seems ready to take it.”
For his part, Dimon concluded: “We are not proud of Login to read more