- Gentlemen, start your drones: Judge’s ruling opens door for commercial use
- Soldier who hid, bragged about not saluting flag to be punished — in secret
- ‘Maverick’ of the seas: ‘Top Gun’ school for U.S. ship officers to launch
- Putin declares Sochi Paralympics open amid Ukrainian protest
- ‘In Jesus name, we pray’ sparks ire at Ohio council meeting
- Navy’s first laser weapon ready for prime time; drone killer to deploy this summer
- Billionaire backer: Rick Santorum ‘needs to be heard’ in 2016
- Obamacare fallout: 49 percent pessimistic; 45 percent ‘scared’
- DHS accused of holding U.S. citizen at airport, using emails to pry into her sex life
- Seattle socialist: Minimum-wage discussion skewed by ‘right-wing’ GAO analysis
JPMorgan says bad trade has ballooned to $5.8B
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.
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 this moment, but we are proud of our company.”
The investigation, which covered more than a million emails and tens of thousands of voice messages, suggested traders were trying to make losses look smaller, the bank said.
The revelation could expose JPMorgan to civil fraud charges. If regulators decide that employee deceptions caused JPMorgan to report inaccurate financial details, they could pursue charges against the employees, the bank or both.
JPMorgan could not necessarily hide behind the actions of its employees. Regulators could decide that its oversight or risk management contributed to the problematic statements.
As a result of what it found, JPMorgan lowered its reported net income for the first quarter of this year by $459 million. The bank was still widely profitable: Even after the adjustment, it made $4.9 billion for the quarter.
TWT Video Picks
Taxpayers must pay the freight for over-budget train projects
- Kim Jong-un calls for execution of 33 Christians
- Rand Paul wins 2014 CPAC straw poll, Ted Cruz finishes a distant second
- Senate Democrats, Republicans spar over restoring unemployment benefits
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- CURL: The modern GOP really is Reagan's 'Big Tent' party
- Bill Clinton poses for photo with Bunny Ranch prostitutes
- U.S. deploys 12 F-16 fighter jets to Poland as exercise in response to Ukraine situation
- High schooler suing parents for money shot down by judge
- Six Senate seats could hinge on Keystone pipeline
- Russias Putin nominated for Nobel Peace Prize
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again