JPMorgan mess-up claims first casualty

The chief investment officer at JPMorgan Chase, one of the highest-ranking women on Wall Street, will retire, the company said on Monday. She becomes the first casualty of the bank’s $2 billion trading blunder.

By Pallavi Gogoi (AP)

Published: Tue 15 May 2012, 10:41 PM

Last updated: Tue 7 Apr 2015, 12:25 PM

The bank said Ina Drew, 55, would retire after more than 30 years with the company. She will be replaced by Matt Zames, an executive from JPMorgan’s investment bank.

Chief executive Jamie Dimon said Drew’s “vast contributions to our company should not be overshadowed by these events.”

JPMorgan, the largest bank in the United States, is seeking to minimise the damage from the trading mistake, which Dimon has conceded will complicate the efforts of banks to fight certain regulatory changes.

Drew, one of the highest-paid officials at JPMorgan Chase, had offered to resign several times since Dimon disclosed the trading loss on Thursday, a person familiar with the matter told The Associated Press on Sunday.

At least two other executives at the bank will be held accountable for the mistake, the person said.

Drew oversaw the division of the bank responsible for the loss. She was paid $15.5 million last year and almost $16 million in 2010, making her one of the highest-paid officials at JPMorgan, according to a regulatory filing.

Drew declined comment through a bank spokeswoman. Kristin Lemkau, a spokeswoman for JPMorgan Chase, also declined comment.

The Wall Street Journal reported on Sunday that Drew and two other executives were expected to resign soon.

The Journal also reported that 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 that it was not clear when that would happen.

The surprise loss has been a black eye for the bank and for Dimon, who is known in the industry both as a master of risk management and as an outspoken opponent of some proposed regulation since the crisis.

Dimon said in a TV interview aired on Sunday that 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 that was taped on Friday and aired on NBC’s Meet the Press.

“There’s almost no excuse for it.” Dimon said he did not know the extent of the problem when he said in April that 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.

A piece of financial regulation known as the Volcker rule would prevent banks from certain kinds of trading for their own profit. Dimon has said the trading involved in the $2 billion loss would not have fallen under the rule.

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