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Report: Bank execs to step down
The Associated Press archives JPMorgan Chase lost $2 billion in trading designed to hedge against risk. (CP)
NEW YORK -- Three high-ranking executives at JPMorgan Chase are expected to leave their jobs this week after a trading blunder cost the bank $2 billion, the Wall Street Journal reported Sunday.
The Journal, citing people familiar with the situation, reported one of the executives is Ina Drew, who for seven years has run the risk-management division responsible for the loss.
The other two identified by the newspaper are an executive in charge of the London desk that placed the trades and a managing director on that team. The bank did not immediately return a message from The Associated Press.
The $2-billion loss, disclosed by CEO Jamie Dimon, has been an embarrassment for the bank and led lawmakers and critics of the banking industry to again call for tougher regulation of Wall Street.
Drew, one of the highest-ranking women on Wall Street, is the bank's chief investment officer. She was paid $15.5 million last year and almost $16 million the year before, according to a regulatory filing.
The Journal reported Bruno Iksil, the JPMorgan trader identified as the "London whale" because of the giant bets he placed, was also likely to leave, but the paper reported it was not clear when that would happen.
On Friday, investors shaved almost 10 per cent off JPMorgan's stock price. Dimon said in a TV interview aired Sunday he was "dead wrong" when he dismissed concerns about the bank's trading last month.
"We made a terrible, egregious mistake," Dimon said in an interview taped Friday and aired on NBC's Meet the Press. "There's almost no excuse for it."
Dimon said he didn't know the extent of the problem when he said in April the concerns were a "tempest in a teapot."
The loss came in the past six weeks. Dimon has said it came from trading in so-called credit derivatives and was designed to hedge against financial risk, not to make a profit for the bank.
Dimon said the bank is open to inquiries from regulators. He has also promised, in an email to the bank's employees and in a conference call with stock analysts, to get to the bottom of what happened and learn from the mistake.
-- The Associated Press
Republished from the Winnipeg Free Press print edition May 14, 2012 B7
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