The $2 billion trading loss at JPMorgan Chase, the result of a failed hedging strategy, doesn't carry the traits of a rogue trader, says investor Dennis Gartman, founder of The Gartman Letter.
"I operate under the old rule that there is never just one cockroach, when ill news comes out there is usually more ill news to follow,” Gartman tells CNBC.
"This clearly isn’t a rogue. This is not the same thing that happened at SocGen, by any stretch of the imagination," adds Gartman, referring to 2008 trading losses suffered by French Bank Societe Generale at the hands of trader Jerome Kerviel.
While the dust has yet to settle, the loss appears to stem from a proprietary operation, Gartman says.
Under proprietary trading, a bank uses its own money rather than customer funds to trade stocks, bonds, currencies and other financial instruments.
JPMorgan CEO Jamie Dimon was quick to conduct damage control.
"The portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought," Dimon told reporters, according to the Associated Press.
"There were many errors, sloppiness and bad judgment."
Because of the $2 billion trading loss, JPMorgan expects to post a loss of $800 million this quarter at its corporate and private equity unit, the AP adds.
The unit originally expected to post a profit of $200 million.
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