JPMorgan Chase chief executive Jamie Dimon greeted with noisy protests as he prepared to testify before the Senate Banking Committee in 2012. "This man is a crook and needs to go to jail!" yelled one man.
A new Senate report shows that last year JPMorgan Chase, the country's biggest bank, manipulated documents and ignored internal controls as they built up trading losses. Jamie Dimon, the chief executive, also withheld information from regulators. The 300-page report was released the day before the Senate plans to question bank leaders and regulators at a hearing, and "it may also foreshadow a criminal case against employees at the heart of the troubled wager," according to the NYT. “While we have repeatedly acknowledged significant mistakes, our senior management acted in good faith and never had any intent to mislead anyone," a spokeswoman for the bank said.
Mr. Dimon, whose reputation as an astute manager of risk has been undercut by the trading losses, comes under the harshest criticism yet from the Senate investigators. The chief executive signed off on changes to an internal alarm system that underestimated losses, seemingly contradicting his earlier statements to lawmakers, according to the report.
He is also accused of withholding from regulators details about the investment bank’s daily losses — and then raising “his voice in anger” at a deputy who later turned over the information.
While people close to the matter dispute whether the outburst actually happened, it illustrates a broader problem at JPMorgan: after emerging from the financial crisis in far better shape than rivals, the bank saw itself as being above its regulators. The bank was so filled with hubris, Senate investigators said, that an executive once screamed at examiners and called them “stupid.”
The bipartisan report, citing some of the same private documents that F.B.I. agents are now poring over, also highlighted how JPMorgan managers “pressured” traders to lowball losses by $660 million, a previously undisclosed figure, and then played down the problems to authorities.
With this line from the Times' report, you may start to think that the "too big to fail" could be falling..."After examining hundreds of e-mails and hours of taped phone calls, the people said, federal investigators also plan to interview top JPMorgan executives in the coming weeks, including Mr. Dimon."
But then the next line is a big let down, "While authorities do not suspect the chief executive of wrongdoing, the meetings signal that the case is at an advanced stage."
What a charade.
There is one highlight to come from this; Beginning at 9:30am Friday, Matt Taibbi will be live-blogging a hearing held by Senator Carl Levin's Permanent Subcommittee on Investigations who will be grilling J.P. Morgan Chase executives and high-ranking federal regulators in a get-together entitled, "J.P. Morgan Chase "Whale" Trades: A Case History Of Derivatives Risks And Abuses." Bring your popcorn and be there.