BUSINESS

Jamie Dimon Declares There Was 'No Hiding, Lying, Bullshitting' About London Whale

06/11/2013 04:41 pm ET
AP

Jamie Dimon and the Senate Permanent Subcommittee On Investigations apparently have somewhat different understandings of what "hiding, lying and bullshitting" mean.

The JPMorgan Chase CEO, speaking at a conference in New York on Tuesday, declared, “There was no hiding, there was no lying, there was no bullshitting, period," about the bank's "London Whale" trading losses last year, Bloomberg reports.

For good measure, Dimon also dared anybody thinking about suing the bank over its $6 billion in losses to just go ahead and try him, Bloomberg reports. “Anyone who sues, we’re going to fight that one till the end, too, by the way,” Dimon reportedly said. “So keep that in mind.”

Dimon's self-described bullshit-free handling of the London Whale debacle stands in contrast to the Senate Permanent Subcommittee on Investigations report on the losses, which came out back in March. That is essentially a laundry list of various forms of hiding, lying and bullshitting on the part of JPMorgan when it came to the London Whale.

Here are just some of the chapter headings from the Table of Contents of that report: "Hiding Losses... Misinforming Investors, Regulators, and the Public... Mischaracterized High Risk Trading as Hedging... Hid Massive Losses... Dodged OCC Oversight." According to the report, the bank tried to hide from regulators and investors the risks and losses piling up on the London trading desk of its chief investment office, which had made such a gargantuan bet on credit derivatives that one of its traders had earned the nickname of the "London Whale."

Dimon personally declared to investors in a conference call on April 13, 2013 -- after the London Whale had already started to lose money, but the news media had just started to catch on -- that the whole thing was a "tempest in a teapot." By that time, according to the Senate report, Dimon "was already in possession of information about the [London Whale's] complex and sizeable portfolio, its sustained losses for three straight months, the exponential increase in those losses during March, and the difficulty of exiting the [London Whale's] positions."

During that same conference call, former JPMorgan chief financial officer Douglas Braunstein declared that the London Whale's trades had been vetted by the bank's risk-management department. In fact, the Senate report says, the bank's risk managers "knew little about the [London Whale] and had no role in putting on its positions."

When asked by the Senate subcommittee about these allegations in March, Braunstein either had a faulty memory or said he was just going on the best information available to him. Dimon was not even asked to testify, having already appeared before the Senate Banking Committee for a gentle tongue-bath in June 2012.

The bank's standard response to these accusations has been that it gave everybody the best information it had as soon as it could. And certainly once the London Whale carcass was on the beach for all to see and smell, Dimon & Co. were profuse in their apologies and admissions that the bank had made a terrible mistake. Dimon had his pay cut in half this year, to a mere $11.5 million, and there was even a brief moment when it seemed he might lose one of his lucrative jobs.

But in the end Dimon kept all of his jobs. And Job One now appears to be trying to close the door, as forcefully as possible, on the London Whale debacle.

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