JPMorgan Brings the SIZZLE: Jamie Dimon Grilled on Capitol Hill
JPMorgan (NYSE:JPM) CEO Jamie Dimon appeared before the House Financial Services Committee Tuesday in his second visit to Capitol Hill in connection with the huge trading loss revealed last month.
Dimon regretted the loss but refused to accept personal responsibility for it, saying he had relied upon his people at the bank, and that “we disclosed what we knew when we knew it.” Referring to his certification of JPMorgan’s risk controls in its statutory filing in February, Dimon said, “I believed at that time that the risk controls at the CIO were properly being done.”
He sidestepped the tricky question on whether he should offer to have his compensation cut, saying only that it was a decision for the board, and that “I can’t tell the board what to do.”
In contrast to the members of the Senate Banking Committee, who Dimon faced last week, members of the House Financial Services Committee took a harder line with Dimon, even questioning him on the bank’s huge size and the implications for taxpayers in the event the bank went bad. Dimon, looking somewhat worn out, acknowledged: “No, we’re not too big to fail.”
However, “I don’t think there’s any chance we’re going to fail,” he added.
But he may still have to take flak from the Securities and Exchange Commission. SEC Chairman Mary Schapiro, who appeared before the Committee ahead of Dimon, said the Commission was investigating whether JPMorgan concealed a significant change in its value-at-risk model that understated the bank’s risk when it filed its April earnings statement, thereby misleading investors. Schapiro is reported to have told the lawmakers that the SEC had a number of potential sanctions that could be used against JPMorgan.
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