JPMorgan Chase dropped a hefty financial bomb on everyone yesterday, admitting that it lost $2 billion in six weeks after some bad trading decisions. CEO Jamie Dimon revealed the news after trading closed last night, admitting that the company only has itself to blame.
“These were egregious mistakes,” he said, according to the L.A. Times. “We have egg on our face, and we deserve any criticism we get.”
The financial industry seemed a bit shocked, as JPMorgan has managed to keep itself out of much of the messes that have plagued Wall Street through the financial crisis. Many attribute the bank’s moves to keep a lid on excessive risks to Dimon’s leadership of the company.
Dimon explained that the $2 billion in trading losses happened in the last six weeks, and could “easily get worse.” Those losses came from derivative bets in the company’s Chief Investment Office, the part of the bank that trades to balance the company’s assets and liabilities.
There are reports of a single JPMorgan trader in Europe who’s been dubbed “the London whale,” who has been making apparently massive bets.
JPMorgan stock took a hit both in after-hours trading last night and this morning in light of the news.
This kind of huge mistake could lead to stronger bank regulations, admitted Dimon, who seems to be putting himself squarely in the line of fire on this one.
“It’s very unfortunate, plays right into all the hands of a bunch of pundits out there, but that’s life and I’ll have to deal with that,” he said.
JPMorgan Chase discloses $2-billion trading loss [L.A. News]