* Dimon says bank disclosed what it knew when it knew it
* SEC is investigating whether JPMorgan misled investors
* SEC's Schapiro says companies must speak truthfully
* Dimon defends JPMorgan's size
By Sarah N. Lynch and David Henry
WASHINGTON, June 19 (Reuters) - JPMorgan Chase & Co Chief Executive Jamie Dimon said his bank was upfront with investors about its multibillion-dollar trading loss, even as regulators investigate whether JPMorgan disguised a dramatic rise in risk-taking.
Dimon, testifying on Tuesday for the second time in a week before lawmakers about the failed hedging strategy, acknowledged that JPMorgan in January changed a "value-at-risk" model for the trading portfolio in question.
The bank did not disclose the change until May 10, when Dimon also revealed that the trading portfolio had produced at least $2 billion in losses.
"We disclosed what we knew when we knew it," Dimon told the House Financial Services Committee on Tuesday.
Dimon's comments came after the committee heard from a panel of regulators, including Securities and Exchange Commission Chairman Mary Schapiro, who gave more details about her agency's investigation into the trading loss.
Schapiro said the SEC is looking at whether JPMorgan misled investors in its April earnings statements by failing to disclose the value-at-risk (VaR) change. At that time, Dimon also called press reports about a "London whale" trader with an outsized position a "tempest in a teapot".
The model change disguised a spike in the riskiness of the particular trading portfolio by cutting in half its VaR number.
"If you chose to speak, you absolutely must speak truthfully and completely and not allow yourself to leave any kind of misleading impression from the information that you are putting out," Schapiro said.
Dimon's testimony on Tuesday followed his appearance last Wednesday before the Senate Banking Committee, where senators were mostly deferential.
A few members of the House Financial Services Committee went harder at Dimon, asking him repeatedly to defend the size of JPMorgan, the nation's largest U.S. bank by assets.
"No, we're not too big to fail," said Dimon, who at times appeared more tired and exasperated than during last week's hearing.
"I don't think there's any chance we're going to fail," he added.
The SEC is investigating the trading loss, along with the Commodity Futures Trading Commission. The FBI has also said it is looking into the losses.
Schapiro on Tuesday gave her most detailed comments yet on her agency's probe.
"The area we're focused on and concerned about is a change with respect to the VaR model they used for their earnings release on April 13 that had the effect, yes, of understating the value-at-risk," Schapiro said.
She said it is hard to say what sort of financial penalty JPMorgan could face, but said the agency has a large number of potential sanctions.
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