Co-CEO of JPMorgan Chase & Co. (NYSE:JPM)’s corporate and investment bank Michael Cavanagh will leave to become co-chief operating officer of The Carlyle Group LP (NASDAQ:CG).

JPMorgan Michael Cavanagh

Daniel Pinto will now become sole chief executive of the JPMorgan’s corporate and investment bank effective immediately.

Internal review of London Whale episode

JPMorgan Chase & Co. (NYSE:JPM) suffered a loss due to big derivative wagers in the chief investment office of the bank in London. The incident also gave JPMorgan a tainted reputation for being a bank with poor risk handling capability. After the incident, JPMorgan faced various investigations and probes.

Last year, JPMorgan Chase & Co. (NYSE:JPM)’s board of directors voted to release the internal report on the botched trades which cost the bank over $6 billion. The report on the London Whale incident is more than 50 pages long and it’s the culmination of the investigation by the company’s former CFO Mike Cavanagh. The decision to release the report came amidst reports that the bank would face enforcement action in the U.S. and the U.K. over the incident.

Poor risk controls highlighted by Cavanagh and team

The London Whale task force led by Cavanagh cited poor risk controls and Dimon’s failure to question information he received from deputies as contribution to the over $6 billion loss.

In a statement today Dimon said he has worked with Mike Cavanagh for over 20 years and he was ‘an integral part’ of the management team. He added: “While we would prefer he stay at the firm, we are glad he’s going to a valued client in Carlyle”.

Last month it was reported Cindy Armine, the compliance chief of JPMorgan Chase & Co. (NYSE:JPM) for less than a year, would be leaving to take a similar position at First Data Corporation. Armine was promoted to chief compliance officer in early 2013 in the wake of the firm’s London Whale trading issue, replacing Martha Gallo, who retired 13 months ago.  Armine’s resignation comes two years after Barry Zubrow was replaced as chief risk officer of JPMorgan Chase & Co. for the same “London Whale” trade.

In a statement issued Tuesday, Carlyle said Cavanagh will join The Carlyle Group LP (NASDAQ:CG)’s executive board and will share both positions with company veteran Glenn Youngkin, who is currently the sole chief operating officer. The appointments highlight the succession planning under way at some of the major private equity firms, which have been run by their founders for decades. Carlyle’s founders, who are now in their 60s, also poached veteran dealmaker Kewsong Lee from Warburg Pincus LLC last year and named him deputy chief investment officer for private equity.