JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said the firm lost about $2 billion on synthetic credit securities after an “egregious’” failure in its chief investment office, which the bank says focuses on hedging.
“This portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed,” the New York-based company said today in a quarterly securities filing. JPMorgan declined 5.5 percent to $38.50 in extended trading at 5:55 p.m. in New York...More
This is a bad time for bankers to lose $2 Billion while speculating. Not that there is a good time to lose such an amount of money, but in an election year at hand and lots of regulation calls circulating all over the place, Dimon didn’t do the industry a good service. A lot of this case sounds very familiar and will raise some eyebrows with people on main street, especially since JP Morgan was always presented as the “smartest” bank in the country.