Top JPMorgan Chase exec to resign over loss

(CBS/AP) JPMorgan Chase is expected to accept the resignation of one of the highest-ranking women on Wall Street after the bank lost $2 billion in a trading blunder, a person familiar with the matter said Sunday.

The bank will accept the resignation of Ina Drew, its chief investment officer, the person told The Associated Press, speaking on condition of anonymity because the person was not authorized to discuss the decision publicly.

Drew, 55, one of the highest-paid officials at JPMorgan Chase, had offered to resign several times since CEO Jamie Dimon disclosed the trading loss on Thursday, the person said. Pressure built on the bank over the weekend to accept.

At least two other executives at the bank will be held accountable for the mistake, the person said.

Earlier in the day, CEO Jamie Dimon called the trades "a terrible, egregious mistake." He also acknowledged the Security and Exchange Commission is investigating whether rules were broken.

"We know we were sloppy. We know we were stupid. We know there was bad judgment. We don't know if any of that is true yet. And of course regulators should look at something like this. That's their job so we are totally open to regulators and they will come to their own conclusions," Dimon said. "We took far too much risk, the strategy that we had was barely vetted, it was badly monitored. It should never have happened."

Michael Greenberger, a former Wall Street regulator and current law professor, said it should come as little surprise that smart, savvy bankers like Dimon made mistakes like this.

"These kinds of transactions are as complex as they are risky. And it's very difficult for anybody really to understand what's going on. I think (in) the end (it will be) shown the trader himself didn't understand what was going on," Greenberger said.

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Part of the problem is not just understanding these trades.

"These traders are given enormous discretion without proper supervision or Understanding, and you end up with these enormous losses," Greeneberger said.

The sweeping financial reform bill that was passed in the wake of the last financial crisis - the Dodd-Frank bill - would have had safe guards in place to prevent these trades, had they been implemented, Greenberger said.

"This kind of trade would have been banned" under a fully-implemented Dodd-Frank, Greenberger said. "JP Morgan Chase has been arguing that these kinds of trades should go forward. But (some of the rules) on Dodd-Frank, the way they were written, these kinds of risky, complex trades would be banned."

What's scary about the situation is how likely it is to happen again.

"Of course it could happen at another bank next week," Greenberger said. "JP Morgan Chase and Jamie Dimon are the brightest guys in the room. If they have this problem, god knows how many other people have these problems. And this could lead us right back to where we were in 2008."

[hypnotoad72]

So how big is the golden parachute, and surely anyone who complains is jealous because a successful businessman has earned his money and his parachute, yes? ;-o

[MichaelH1952]

And why has Mr. Dimon not resigned? Doesn't the buck ultimately stop with him? If he has been unwilling or unable to adequately supervise his bank in the past, why should we think he will do any better in the future. I sincerly hope that his board of directors/shareholders hand him the 'pink slip' with NO severance package.

[hypnotoad72]

Not in "the new normal", it doesn't...

[sjc_1]

They just gave him a $3 million raise today, with 91% voting to approve the pay package.

[alinrodneyvil]

And The Republicans in the Congress want to get rid of all regulations on these thieves. Follow the money right to their offices.

[sdemaggie]

Why did Dimon annouce this loss when it is immaterial to Chase's quarterly bottom line? It looks to me as if Dimon found a way to politically out manuveur three of his internal rivals. Heads are rolling.

[sjc_1]

Dimon is attending a shareholder's meeting tomorrow, he got out ahead of the curve.

[chroniccomplainer]

How can we expect Congress to pass regulations that might hurt their cash cow for re-election. That may seems complicated to the regulators but not to the citizens.

[honest_pols]

RESIGN AND WALK AWAY AFTER ALL THE FINANCIAL SWINDLES AND RUINATION CAUSED?

THE FOLLOWING ARE LEGITIMATE QUESTIONS WHICH ARE GUARANTEED TO NOT GO AWAY:

What will be done to bring justice for all the cheated victims of JP Morgan and their fellow Co-Conspirator Banks and bankster/financiers, who not only caused major financial damage but in many instances have destroyed lives with their sophisticated, well-calculated 'investment swindles', stock and commodity price-manipulations, etc, for all those years?

What will be done to the multitude of other fraudulent, economy-wrecking and nation-wrecking Wall St investment bankers, brokers, and other financiers who have essentially snatched away Tens of Millions and likely Hundreds of Millions of people's futures, by their deliberately-misleading, complex investment and other financial swindles which said perpetrators have indeed committed for decades?

Or are America's legislators, regulators, judges, lawyers, accountants, and other of these parasitic financiers' associates in on the fraudulent, Licensed-to-Steal, Wall St/investment banking system, and will continue to do everything within their power to keep things the same?!

IT HAS BECOME INCREASINGLY APPARENT, THAT PRESIDENT OBAMA HAS WILLFULLY ACCOMMODATED, AND FACILITATED THE FUNNELING OF HUNDREDS OF BILLIONS TO TRILLIONS OF DOLLARS, TO HIS WALL ST AND OTHER CORPORATE 'FRIENDS AND ASSOCIATES' CONTROL ON AN UNPRECEDENTED SCALE, THEREBY AIDING, ABETTING, AND ENCOURAGING CONTINUATION OF THE SAME!

AS A RESULT, WE CAN ONLY EXPECT A BREAKDOWN OF RESPECT FOR ...
... VIRTUALLY EVERYTHING ...
AS EXEMPLIFIED BY OUR DISHONEST LEADERS!

[fedup12]

Part of the problem is not just understanding these trades.

"These traders are given enormous discretion without proper supervision or Understanding, and you end up with these enormous losses,"

What's scary about the situation is how likely it is to happen again.
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Three parts of this story struck me.
1. is why regulators or regulations are not going to fix the propblem.

2. Is why Dimon should step up and own it. He is a coward.

3. Self explanatory. And why we should not allow super banks that can take America down when their poor business practices catch up with them.

[fedup12]

What I mean by the regulations not going to fix the problem is just because I dont think they would even recognize anything bad was happening. And we cant get enough regulators to even monitor the problem.

[forumcomments]

The fact that commercial banks are still being impacted by risky transactions might even be worse than the 2008 financial crisis. The drive for higher and higher profits tend to create bad decisions. The investment and commercial banks need to be separate and the commercial banks need to be insulated from the risky investment world. I would think the boards of the commercial banks would be concerned with derivatives driving profits.

[BogusPeavy]

Does anybody else notice a similarity between these guys and politicians? They are great at stating what the problem is but have absolutely NO answers and state none. It doesn't take a genius to state that "what we did was wrong" and that "this should not have happened", blah blah. But I get the notion that they'll be right back at it today after letting go the obligatory sacrificial lamb or two to satisfy the doubters. What a joke. If I lost $200 in my job, my boss would fire me. They lost 10,000,000 times that much and get a stern reprimand! Gotta love these guys and the wholesale way they destroy the little guy. A walk in the park.

[nor-one]

Not only did they get a stern reprimand, wait till you see their severance package!! And don't worry about them taking up space on the unemployed line, anybody who can lose that much money in that short a time has other theives lined up to hire them at a higher pay level.

[ahrats]

I guess Jamie Dimon is a savvey banker after lossing 2 BILLION dollars thinks he should stay in control of Chase, I understand there another possible 1 BILLON loss to come, This is why the Bankers should be HUNG not just fired. So an underling goes but the CEO gets to stay so he can lose more money, He obiously not in control and should go TOO.