Drip, Drip, Drip – the Steady Worsening of the JPMorgan Trading Scandal, in a Timeline
Not long ago JPMorgan (JPM) seemed the best-run –- and maybe the only well-run -- bank on Wall Street. JPMorgan had swallowed Bear Stearns and Washington Mutual and still repaid its government loan early – a government loan it insisted it didn’t even need. Now that JPMorgan’s risk controls have failed in a public, epic way, a stock chart shows its shares are starting to look like everyone else's:
So it’s worth asking, is JPMorgan just your run-of-the mill giant, financial screw-up?
Let’s review:
April 6 – The Wall Street Journal runs a story about a trader known as the “London Whale” rattling the debt markets with a large credit default swap trade. Some analysts tell the Journal they’re unaware of the division doing the trading. Regulators request information.
April 13: Dimon tells analysts on conference call that reports about trading loss are overblown: “It’s a complete tempest in a teapot.” Dimon already knew losses topped $1 billion, Bloomberg would later report.
May 10 – JPMorgan discloses a trading loss and “egregious failure.” Stock plummets, analysts downgrade the bank. Regulators and politicians demand answers.
May 14 – Ina Drew, head of the chief investment office, ““retires”.”
May 15 – Dimon meets with shareholders at annual meeting in Tampa and says the bank’s hedge morphed into something else.
May 16 – Reports reveal trading loss may be $3 billion or more.
June 12 – Bloomberg report says Dimon was complacent about risk.
June 13 – Dimon appears in front of Senate committee, blames “poorly conceived” strategies of other senior executives.
June 19 – Dimon gets more of a grilling in front of House Financial Services Committee. SEC says investigating whether JPMorgan disclosed what it knew to investors. Dimon calls loss an “isolated incident.”
June 26 – JPMorgan managers are told the trading loss could reach $9 billion.
July 11 – The Wall Street Journal reports that JPMorgan plans to claw back compensation from Ina Drew and traders involved – but not Jamie Dimon.
July 13 – JPMorgan states loss as $4.4 billion for quarter, $6 billion in all (so far). It says the traders involved may have tried to hide the full amount of losses by mispricing their books. Investors cheer and call it a day.
From the editors of YCharts.YCharts Pro Investor Service includes professional stock charts, stock ratings and portfolio strategies.
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