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May 21, 2012

More trouble on the horizon for JPMorgan Chase

  • last week A $2 billion trading loss, amid word the JPMorgan Chase pushed for a loosening of Dodd-Frank, led to the firing of Chief Investment Officer Ina Drew. The company also announced that Chief Executive Officer Jamie Dimon would testify before Congress.
  • this week The Commodity Futures Trading Commission is starting an investigation, too. Chairman Gary Gensler confirmed the existence of an “investigation related to credit derivative products,” at a Financial Industry Regulatory Authority conference.  source

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16:03 // 1 year ago
May 12, 2012
JPMorganChase fought for a loophole that led to $2 billion trading loss
Not long after Dodd-Frank got passed, the company made arguments for a loophole in the Volcker Rule, which takes effect in July, to allow some of the types of portfolio hedging that that company used as it produced a $2 billion loss recently. “JPMorgan was the one that made the strongest arguments to allow hedging, and specifically to allow this type of portfolio hedging,” noted one Treasury Department official. Officials who worked on the law, such as Sen. Carl Levin, have made it clear that allowing for this type of activity was not their intention with the law. Now, they have a pretty clear $2 billion argument against allowing such a loophole to get through. (photo by Scott Eells/Bloomberg; edit for clarity)

JPMorganChase fought for a loophole that led to $2 billion trading loss

Not long after Dodd-Frank got passed, the company made arguments for a loophole in the Volcker Rule, which takes effect in July, to allow some of the types of portfolio hedging that that company used as it produced a $2 billion loss recently. “JPMorgan was the one that made the strongest arguments to allow hedging, and specifically to allow this type of portfolio hedging,” noted one Treasury Department official. Officials who worked on the law, such as Sen. Carl Levin, have made it clear that allowing for this type of activity was not their intention with the law. Now, they have a pretty clear $2 billion argument against allowing such a loophole to get through. (photo by Scott Eells/Bloomberg; edit for clarity)

11:38 // 1 year ago