JPMorgan CEO Dimon defends bank's disclosure
Jamie Dimon, CEO of JPMorgan Chase, testifies before the House Financial Services Committee on Capitol Hill in Washington on June 19, 2012. / AP Photo/Jacquelyn Martin
(CBS/AP) WASHINGTON - JPMorgan Chase (JPM) chief executive Jamie Dimon told lawmakers Tuesday that the bank did its best to fully inform investors about its risk strategy several weeks before it suffered a $2 billion-plus trading loss.
Appearing before the House Financial Services Committee, Dimon said that the bank trusted its methods for assessing risk and that the models used provided the best information at the time. The risk models are frequently updated, he said.
"We disclosed what we knew when we knew it," Dimon told the panel.
The Securities and Exchange Commission is examining whether JPMorgan's earnings report on April 13 gave adequate information on the risk model the bank was using. Earlier at the hearing, SEC Chairman Mary Schapiro told the panel "there could be" violations that would merit legal sanctions against the bank.
Schapiro also said it wasn't clear whether Dimon failed to speak truthfully when he dismissed reports of the trading loss in a conference call with analysts in April as "a tempest in a teapot."
U.S. Comptroller of the Currency Thomas Curry, whose agency is a key regulator of JPMorgan, told the panel that the loss appeared to be caused by "serious risk management weaknesses or failures at the bank."
Curry made similar remarks earlier this month at a Senate hearing.
Dimon told the Senate Banking Committee last week that he was aware of the trading strategy used by the investment operation that suffered the loss but that he didn't approve it. He said the bank made a mistake and that senior banking executives responsible for the loss will probably have their pay taken back by the company.
The loss disclosed last month has raised concerns that the biggest banks still pose risks to the U.S. financial system, less than four years after the financial crisis erupted.
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