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It’s been just over a month since JPMorgan revealed that disastrous multi-billion dollar trading loss in the bank’s Chief Investment Office in London related to derivatives trades. Now Bloomberg’s Erik Schatzker, Dawn Kopecki and Bradley Keoun report that JPMorgan’s chief executive Jamie Dimon, who had a reputation for being one of the best risk managers, could have stepped in before it lost $2 billion but didn’t because he exempted the CIO office from strict oversight, according to unnamed execs at the bank.
Dimon treated the CIO differently from other JPMorgan departments, exempting it from the rigorous scrutiny he applied to risk management in the investment bank, according to two people who have worked at the highest executive levels of the firm and have direct knowledge of the matter. When some of his most senior advisers, including the heads of the investment bank, raised concerns about the lack of transparency and quality of internal controls in the CIO, Dimon brushed them off, said one of the people, who asked not to be identified because the discussions were private.
Dimon did not comment on the Bloomberg report. He is scheduled to testify before a Senate committee in Washington, D.C. tomorrow.