JPMorgan is still reeling from its multi-billion “misstep.” The bank, the largest in the United States, said last Thursday that it had lost billions in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money.
As it turns out, JPMorgan CEO Jamie Dimon personally oversaw the trades that lead to the massive losses.
The Wall Street Journal’s Monica Langley tells the story:
On April 30, associates who were gathered in a conference room handed Mr. Dimon summaries and analyses of the losses. But there were no details about the trades themselves. "I want to see the positions!" he barked, throwing down the papers, according to attendees. "Now! I want to see everything!"
Dimon, who usually oversees the trades pretty closely, failed to follow up on how these particular trades were being executed. He couldn’t believe his eyes when saw the numbers. In fact, he “couldn’t breathe," according to the WSJ report.
And in case you were wondering just how much JPMorgan lost in bad trades, Langley has got you covered [emphasis added]: "Those trading positions have produced losses that could total as much as $5 billion..."
The Journal continues [emphasis added]:
Mr. Dimon personally approved the concept behind the disastrous trades, according to people familiar with the matter. But he didn't monitor how they were executed, triggering some resentment among other business chiefs who say the activities of their units are routinely and vigorously scrutinized.
Sen. Tim Johnson (D-SD), the chairman of the Senate Banking Committee, says he plans to ask Dimon to testify before the committee about bank's losses.
"The big lesson I learned: Don't get complacent despite a successful track record," Dimon said in an interview Wednesday. "No one or no unit can get a free pass."
(H/T: Sam Ro Business Insider)
The Associated Press contributed to this report.