JPMorgan Chase & Co. (JPM)’s board of directors assigned former KPMG International Chairman Timothy Flynn to its risk committee after an internal probe blamed lax controls for a $5.8 billion trading loss in London.
Flynn, who retired from the accounting firm in October and was elected to JPMorgan’s board in May, joined the risk panel in July, said Joe Evangelisti, a spokesman for New York-based lender. JPMorgan, led by Chief Executive Officer Jamie Dimon, 56, is the largest bank in the U.S. by assets.
The risk committee came under scrutiny after the trading loss became public May 10, when it was estimated at $2 billion. JPMorgan blamed large and illiquid trades at the chief investment office that couldn’t be unwound without disrupting markets. The risk panel’s three members included only one with Wall Street experience, James Crown, and he hadn’t been employed in the industry for more than 25 years.
The other members included Ellen Futter, 62, president of the American Museum of Natural History, who sat on American International Group Inc. (AIG)’s governance committee in 2008, and David Cote, 60, chief executive officer of Honeywell International Inc. (HON) The Financial Times reported in May that Futter was expected to step down from the panel.
Flynn, whose age was listed as 55 in a March news release, led KPMG International from 2007 until he retired in October, according to the bank. “He has extensive experience in financial services and risk management from 32 years with KPMG and its predecessors,” the bank said.
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