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Why Jamie Dimon Should Resign as CEO of JPMorgan Chase

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Where there is smoke, there is fire. So goes the old saying and with JPMorgan Chase, the smoke is billowing out at an alarming rate. At last count, the nation's largest bank seemed to have more civil and criminal investigations and prosecutions being pursued against it by the U.S. and the UK than it has customers.

The agencies involved include the SEC, the Justice Department, the Federal Reserve, Congress, the Office of the Comptroller of the Currency, the CFTC, and British authorities; and possible problem areas for the bank include questionable credit card debt recoupment practices, fraudulent marketing of mortgage-backed securities, bribery of Chinese officials, manipulation of energy markets, and of course poor risk management in its trading operations. And then there are the individual and class-action lawsuits stemming from some or all of the above.

In short, JPMorgan Chase is in serious trouble. In fact, it almost does not matter anymore how many of the charges against the bank actually stick since the distraction of fighting so many legal battles, the massive cost (on top of the $17.3 billion in legal expenses the bank incurred from 2010 through 2012, it estimates it will have to pay $6.8 billion more than what it already put aside for 2013), and the bad press that will accompany all this, will do plenty of damage in itself. Not to mention that the bank's alleged shenanigans have made it a prime candidate to be broken up. JPMorgan Chase has become, in essence, the poster child for bad Wall Street behavior, and it will be made to pay for having earned that mantle.

Even more unfortunately for the bank, it has no one to blame for this mess but itself -- and its imperious CEO, Jamie Dimon.

While Dimon may not have been directly involved in violating any laws, he has always run this bank like his personal kingdom, and has complete control of every aspect of its operations. As such, he needs to take responsibility for the situation that his bank finds itself in today. Whatever happened, and regardless of whether the U.S. and UK authorities ultimately clear the bank of some of the charges, there was very likely a massive breach of fiduciary duty under Dimon's watch, and a reckless disregard for good corporate behavior. That in itself is enough to cast serious doubt on Dimon's ability to lead the bank into the future, and necessitates his immediate departure.

So far Dimon has survived at the helm of JPMorgan Chase because of his fierce control over the Board and because he has been able to churn out big quarterly profits, but if those profits are being made through illicit activities, if hefty legal expenses and fines eat into those very profits, and if the long-term future of the bank is now in jeopardy, then Dimon's stewardship may be a liability. In order for JPMorgan Chase to recover from the hits that it is taking, it needs not only fresh thinking but a fresh face to reassure the markets. Dimon may be promising better compliance with regulations from now on, but that is too little too late; he should have realized that a long time ago and acted on it.

By neglecting to do so, he has forfeited his right to stay on.

Supporters of Dimon will no doubt keep pointing to his successes to keep him in his job, but I would argue that when those successes themselves are tainted by the possibility of wrongdoing (and on so many fronts), then it is no longer reasonable to give Dimon the benefit of the doubt. There are simply too many questions about the ethics of this bank and its CEO to be ignored anymore. At the very least, a major house cleaning should be on the agenda to move forward.

This is, after all, a public company. Not the Jamie Dimon Show.

SANJAY SANGHOEE is a political and business commentator. He has worked at leading investment banks and hedge funds, has appeared on CNBC's 'Closing Bell' and HuffPost Live on business topics, and is the author of two thriller novels, including "Killing Wall Street". For more information, please visit www.sanghoee.com