Monday, May 14, 2012

JPMorgan (JPM) CIO Steps Down after $2 Billion Loss

The chief investment officer of JPMorgan (NYSE:JPM), Ina Drew, who oversaw the division of the giant bank responsible for $2 billion in losses in the last quarter, has "retired."

Drew has offered to step down several times since the revelation of the enormous losses, and finally has taken the step. According to a regulatory filing, Drew made $15.5 million in 2011, one of the highest salaries at the bank.

In April CEO Jamie Dimon asserted there was no reason for concerns over the trading practices of the bank, although at the time he said that the losses hadn't happened yet. They have come over the last six weeks.

He said on Sunday on NBC's "Meet the Press" that he was "dead wrong" about the trading situation at the bank, adding, "We made a terrible, egregious mistake."

Speaking even stronger about the situation, Dimon concluded, "There's almost no excuse for it."

The purpose of the trades in question, which were centered around credit derivatives, are supposed to be used as a hedge against financial risk. Instead it appears they were attempted to be used as a way to generate profits for the bank, which resulted in the huge losses.

There is an ongoing internal investigation into the causes of the huge losses by the bank.

At least two more executives at the bank are expected to resign sometime soon.

JPMorgan was trading at $36.19, falling $0.77, or 2.08 percent, as of 11:04 AM EDT.

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