JPMorgan Chase & Co. (NYSE:JPM) former investment bank chief Jes Staley is leaving the bank for BlueMountain Capital Management, a hedge fund that profited after the bank’s losses in the incident involving the so-called “London Whale” in July.
Staley was once considered to be a possible replacement for current CEO Jamie Dimon, who issued a memo thanking Staley for his 34 years of service to JPMorgan Chase & Co. (NYSE:JPM). Dimon also said in his memo that BlueMountain was one of the bank’s important clients.
Staley was set aside as chief of the bank’s investment division in July after the bank’s major losses due to trades which stemmed from large bets made by trader Bruno Iksil, known within the industry as the “London Whale,” in July. At that time, BlueMountain was one of several hedge funds which exploited the bank’s bad trades, which were so large that they created some distortions in price.
After those bad trades, which lost JPMorgan Chase & Co. (NYSE:JPM) billions of dollars last year, sparked a sell-off of the company’s stock and resulted in Dimon giving his testimony to Congress two times, BlueMountain then helped the bank unwind some of them.
Staley will become a managing partner at BlueMountain and will purchase an equity stake. BlueMountain issued a statement saying that the proceeds from Staley’s purchase will go toward “new infrastructure, technology and people.”
In a statement from BlueMountain, Staley said, “I’m very excited to be joining BlueMountain at a time when sea changes in the financial industry combined with the firm’s unique strengths open up enormous possibilities to deliver value to clients.”