Will Congress Make an Example of JPMorgan?
JPMorgan (NYSE:JPM) CEO Jamie Dimon has been invited to Washington to tell lawmakers about his firm’s recent losses. Senate Banking Committee Chairman Tim Johnson said Dimon’s presence has been requested for June 7, when he will be asked to testify about his bank’s $2 billion-plus trading loss.
Johnson wants an explanation as to how Dimon’s company lost billions in a matter of only weeks. He hopes they will be able to “get to the bottom of the massive trading loss” by speaking with Dimon. In his statement, Johnson referenced the Committee’s continued oversight of the implementation of the Wall Street Reform Act, which would seek to prevent such catastrophic mishaps as that for which JPMorgan has recently been in the spotlight.
“As these events have amply demonstrated – much to the dismay of those who endlessly seek to roll back this tough, new law – Wall Street continues to need better risk management, vigorous oversight and unyielding enforcement,” said Johnson.
“I expect Mr. Dimon to come prepared to provide the Committee a better understanding of this massive trading loss so we can take the implications into account as we continue to conduct our robust oversight over the full implementation of Wall Street reform,” Johnson added.
JPMorgan shares are down nearly 22 percent since Dimon announced the firm’s $2 billion (and growing) loss on May 10. His CIO Ina Drew and a handful of others have left the firm. JPMorgan has also been named in a number of lawsuits, one of which is being brought by its own employees, who claim the loss hurt their retirement plans. Investors are also suing, saying Dimon, CFO Douglas Braunstein, and the bank’s board failed to do their fiduciary duty.