It makes me suspicious that Jamie Dimon is busily spraying Febreze all over that big London deal that lost so much money for JPMorgan Chase. The Sarbanes-Oxley act was supposed to prevent these (allegedly) renegade units, because the people at the top now had a legal responsibility to provide oversight. Doesn't anyone in the SEC care about such things? Apparently not.
Also, I've been reading about hedges. This doesn't sound like a hedge. It sounds like they called it a hedge for accounting purposes, which is of course another problem. But hey, this is Jamie Dimon, damn it, and the rules don't apply to him! He will do his little ceremonial apology on Capitol Hill today, and that will be that:
JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said traders in a London unit responsible for a $2 billion loss didn’t understand the risks they were taking and weren’t properly monitored.
“This portfolio morphed into something that, rather than protect the firm, created new and potentially larger risks,” Dimon said in prepared remarks ahead of his appearance tomorrow before the Senate Banking Committee. “We have let a lot of people down, and we are sorry for it.”
Lawmakers plan to question Dimon at hearings this week and next about the bank’s blunders on credit derivatives in its chief investment office after he initially called April news reports about the trades “a complete tempest in a teapot.” Shares of the bank, the biggest in the U.S., have dropped 17 percent since Dimon disclosed the mounting losses May 10, lopping about $26.5 billion from the firm’s market value.
“CIO’s traders did not have the requisite understanding of the risks they took” on bets that were supposed to hedge credit risk, Dimon said. “When the positions began to experience losses in March and early April, they incorrectly concluded that those losses were the result of anomalous and temporary market movements.”
Kabuki theater. A public apology, a stern public talking-to, jokes and cocktails in the back room, and it's back to business as usual.