JPMorgan CEO Dimon Defends Disclosures in Whale Episode

Wednesday, 12 Jun 2013 07:33 AM

 

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JPMorgan Chase & Co. Chief Executive Jamie Dimon, who won a strong vote of confidence from shareholders last month, defended the disclosures the bank made last year about its unfolding London Whale derivatives loss.

"We did everything that we thought was the right thing to do," Dimon said in response to a question about the episode at an investor conference in New York.

Dimon repeated his earlier apologies for the loss that he had mistakenly called a "tempest in a teapot" one month before the company disclosed in May 2012 that it had lost more than $2 billion on the trades.

But Dimon forcefully added that bank officials had properly described the situation as they knew it at the time.

"There was no hiding. There was no lying," Dimon said, emphasizing his remarks with a curse word. "But we were wrong about stuff.

"Nothing was done that was deliberate in any way, shape, or form. I'm completely and totally comfortable about that," he added.

Dimon said that, contrary to some reports, he did not deliberately hold back information from regulators. "We tried to tell them, but we didn't know ourselves sometimes," he said.

Investigators with the U.S. Department of Justice and the Securities and Exchange Commission last year began probes into the loss but have not brought any public actions against the company.

Dimon consolidated his power as both chairman and CEO of the biggest bank in the United States on May 21 when two-thirds of shareholders voted against a proposal at the company's annual meeting that called for him to be stripped of one of his two titles.

Proponents of the measure had argued that the London Whale loss showed that Dimon and other bank executives needed more objective oversight from a board of directors with an independent chairman.

Many shareholders who voted against the measure were concerned that Dimon might leave and that JPMorgan stock would fall if he lost that vote.

Dimon spoke rapidly for more than three minutes about the trading debacle, prompting nervous laughter from the audience when he finished.

Taking a wide range of questions at the conference, which was hosted by Morgan Stanley and broadcast online, Dimon also said the U.S. economy and American consumers were improving steadily despite a political and regulatory environment in Washington, D.C. that acted like a "wet blanket" on growth.

He also said JPMorgan trading revenue for the second quarter is likely to be a little better than previously expected.

Dimon included a warning over the London Whale episode in his remarks on Tuesday: "And, anyone who sues, we're going to fight that one to the end, too, by the way. So keep that in mind."

Shortly after Dimon spoke, lawyers for JPMorgan filed papers in Manhattan federal court seeking to dismiss a lawsuit accusing the bank of deceiving shareholders about Bruno Iksil - the JPMorgan trader nicknamed the London Whale for the size of his positions - and the loss that ultimately topped $6.2 billion.

The bank said the plaintiffs in the shareholder lawsuit had failed to make a case that Dimon and his lieutenants intended to deceive or defraud them.

© 2014 Thomson/Reuters. All rights reserved.

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