JPMorgan
Chase & Co has revealed that it had lost $5.8 billion from credits bets in
its ‘chief investment office’ as some of the traders are accused of trying to conceal
some of the amount. The loss also includes $4.4 billion lost in the second
quarter of the current year. The bank however managed to record a profit of
$4.96 billion.
----------------------------------------------------------------
-------------------------------------------------------------------
The
company’s profits have now fallen by 8.7% for the current quarter as compared
to last year’s. The bank will also adjust previous quarter’s revenue and income
in light of the new information.
The
loss is bigger than analyst had expected as Bloomberg had given an estimate of
$4 billion trading loss. Since the news of the loss had been revealed by
Bloomberg on 5th April, the company has lost $39.7 billion in market
value. The bank had originally disclosed losses of $2 billion and had warned
that it might increase but nobody had anticipated anything near $5.8 billion.
The
bank has also said that losses may further expand from $700 million to 1.7
billion. In the meanwhile, the CIO trader, Bruno Iksil a.k.a the ‘London Whale’
and Ina Drew, the head of CIO, have left the bank.
Jamie
Dimon, the Chairman and CEO has said, “CIO will no longer trade a synthetic
credit portfolio and will focus on its core mandate of conservatively investing
excess deposits to earn a fair return,” In other words, CIO will, from now
onwards, traditional less risky investments.
The
trading scandal is currently being investigated by
- Commodity Futures Trading Commission [US]
- Federal Deposit Insurance Corp
- Federal Reserve Board
- Federal Reserve Bank of New York
- FBI
- Financial Services Authority [UK]
- Securities and Exchange Commission [US]
- Treasury's Office for the Comptroller of the Currency [US]
Your
Comments and Feedback are always appreciated
Relevant
Links
J.P.
Morgan Second-Quarter Profit Fell 8.7% [The Wall Street Journal]
