JPMorgan’s Zames Said to Unwind CIO Stake in LightSquared
JPMorgan Chase & Co. (JPM) will eventually divest holdings in LightSquared Inc., the bankrupt wireless network, and Ebony magazine as new Chief Investment Officer Matthew Zames unwinds the unit responsible for the investments.
Zames, who’s in charge of cleaning up the chief investment office’s $2 billion trading loss, told employees yesterday he’s moving the special investments group out of the division, according to a person with knowledge of the matter. Zames wants to narrow and refocus the CIO on safer holdings, according to the person, who asked not to be identified because the changes weren’t public.
JPMorgan’s shares have dropped about 19 percent since the New York-based company’s May 10 disclosure that a bet on credit derivatives had gone awry, and that the loss could get bigger in the weeks ahead. Zames was plucked from the investment bank four days later to replace former CIO Ina Drew at JPMorgan, the biggest U.S. lender by assets.
The special investments unit, headed by Norma Corio, will be placed under the company’s corporate umbrella, which includes the CIO unit, other private-equity investments and corporate- wide units such as human resources and treasury, the person said. About 10 people who report to Corio will be shifted to the corporate division.
Kristin Lemkau, a JPMorgan spokeswoman, declined to comment. The Financial Times reported the changes yesterday.
Holdings in the special investments group included Ebony publisher Johnson Publishing Co. and a $150 million stake in LightSquared, which filed for bankruptcy protection on May 14. The unit also is one of the shareholders in a fund that agreed to provide capital to Technicolor SA, the money-losing French maker of film technologies where Corio is listed as a nominee for the board of directors at a shareholder meeting scheduled for June 20.
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