JPMorgan struggles to forget the London Whale
It's been about eight months since JPMorgan Chase CEO was forced to admit that a "hedging" ploy went horribly wrong, ultimately costing the bank $6.2 billion.
The bank booked the losses and consumed humble pie in public. Jamie Dimon seemed eventually regained his grove as an arch-influential banker and CEO. But the consequences of those ill-fated trades are still being felt.
The OCC has just issued an expected cease-and-desist order that will force the bank to redouble its compliance and risk management efforts to ensure that such "hedging" lapses do not recur. Some see this as little more than a slap on the wrist. In addition, the bank will also release a report this week, most likely Wednesday, that it hopes will be the definitive word on the issue.
I noted recently that the Dimon himself faces clawbacks due to the incident, one that threatens his status as the top-paid banker on Wall Street. Other executive have already faced clawbacks.
I can only hope that all this blows over again quickly. The fourth-quarter results may well represent an opportunity to switch the subject. Lost in the London Whale discussion, the bank was also hit with a cease and desist order that forces it to beef up its AML compliance initiatives, yet another area in which the bank's reputation has been sullied.
- here's a Forbes overview