JPMorgan Chase & Co. (NYSE:JPM)’s top executives are to blame for the so-called “London Whale” incident, according to a Senate panel. The bank lost $6.2 billion in some huge risky trades last year. The panel released a scathing report on Thursday, blasting the bank’s executives and accusing them of understating the losses from the trading incident by hundreds of millions of dollars and ignoring the risks associated with such trades.
The Senate committee named several top executives at JPMorgan Chase & Co. (NYSE:JPM), including CEO Jamie Dimon. CNBC reports that the report also singled out former chief investment head Ina Drew and former CFO Doug Braunstein. Both Drew and Braunstein are scheduled to testify before the committee later today. Dimon has been questioned privately more than once already.
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The Senate report accused the bank executives of making misleading statements and downplaying the size of the losses. The committee also raised questions about Dimon’s decision to stop providing the profit and loss reports from the bank’s investment office to the Office of the Comptroller of the Currency “because he believed it was too much information to provide to the OCC.”
CBS News reports that in addition to the bank’s executives, the report was also critical of federal regulators, blaming them for a lack of oversight, which the committee said enabled JPMorgan Chase & Co. (NYSE:JPM) to take such huge trading risks. The report also calls for a tighter interpretation of the Volcker Rule, which places restrictions on risky bank trades. The interpretation of that rule is still being debated heavily by regulators at several agencies.
JPMorgan Chase & Co. (NYSE:JPM) released a statement acknowledging that mistakes were made but also defending its actions in the past. The bank also said it has taken steps to correct the issues which led to the heavy losses. The bank’s own internal investigation blamed much of the incident on Drew and the traders in the London office responsible for the losses.