(Updates story with union reaction).
It may have endured the financial crisis without reporting a loss and emerged as one of the dominant players, but JP Morgan was preparing for inevitable scrutiny after disclosing it suffered a trading loss of at least $2 billion from a failed hedging strategy yesterday, according to media reports.
The bank was due to hold a conference call today 5:00 pm ((Eastern). The bank’s website contained few other details on the matter. A press spokesperson declined to comment further, but said the bank will be making additional comments on the issue in due course.
"This puts egg on our face," JP Morgan chief executive Jamie Dimon was quoted by reports as saying in a conference call with analysts. He said the losses were linked to a Wall Street Journal report last month about a trader, dubbed the 'London Whale', who, reports said, amassed an outsized position which hedge funds bet against.
US public services union, AFSCME, renewed its call on JP Morgan shareholders to end Dimon’s tenure as chairman and CEO and to adopt an independent board chair. “Wall Street greed and conflicts of interest drove our economy into a ditch. JP Morgan Chase shareholders need to act together and tell the board that we want meaningful controls over risk and real oversight of management. We need an independent chairman of the board. The stakes are too high to leave Jamie Dimon unsupervised. Dimon denied that the ‘London Whale’ was making risky bets, and now that this has turned out to be a fish story, shareholders need to step in,” AFSCME plan trustee Gerald McEntee said in a statement.
Shareholders are due to vote May 15 at the company’s annual meeting on a shareholder proposal submitted by the AFSCME Employees Pension Plan calling on JPM to adopt an independent board chair who will provide improved oversight and risk management.