Heads are starting to roll at JPMorgan Chase in the wake of the bank’s staggering $2 billion trading loss.
Ina Drew, the global bank’s chief investment officer and one of the most powerful women on Wall Street, has reportedly resigned, along with two other top executives.
Drew, a close associate of bank president Jamie Dimon, ran the risk-management division that was responsible for the enormous losses. She made $15.5 million last year.
The Wall Street Journal said the other two ousted execs are Achilles Macris, who ran the London-based desk that placed the trades, and managing director Javier Martin-Artajo.
Bruno Michel Iksil, the French-born finacier nicknamed ‘Voldemort’ and ‘the London Whale’ who was directly responsible for the trades, was not reported to be on the list.
Dimon, who had dismissed concerns about the losses as a “tempest in a teapot,” was contrite and void of his typical swagger on Sunday.
“We made a terrible, egregious mistake that there is almost no excuse for,” he said on NBC’s Meet the Press.
The $2 billion in bad bets came from trading in credit derivatives in an effort to hedge against financial risk from the turmoil in Europe, not to make a profit.
“Hedging should make your bank less risky. In this particular case, we made a terrible mistake,” Dimon said.
He admitted that JPMorgan Chase’s errors had given the Obama administration new ammunition in the battle for more bank regulation to avoid another credit crisis.
“This is a very unfortunate and inopportune time to have had this kind of mistake,” he said.
Drew, 55, had repeatedly offered to resign since the scale of the loss became apparent in late April, executives at the bank told the Journal.
Dimon did not accept blame until Sunday – two days after the public disclosure of the losses sent JPMorgan’s plunging 9% and dragged down other financial stocks, sparking fears of a new market panic.
Dimon stressed on NBC that JPMorgan, America’s largest bank with $2.27 trillion in assets, is “very strong.” The bank emerged relatively unscathed from the 2008 financial crisis.
Dimon is not considered in trouble, but he may face tough questions about his 2011 $23 million pay package at Tuesday’s annual shareholder meeting.
(Source: NY Daily News)