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Dimon’s Error Was Trusting Government on Bear Stearns, Mayo Says

Jamie Dimon’s mistake was thinking the government would agree to let JPMorgan Chase & Co. (JPM) avoid mortgage-related legal costs after it purchased Bear Stearns Cos. during the financial crisis, said Mike Mayo, an analyst at CLSA Ltd.

“Jamie Dimon trusted the government when he bought Bear Stearns,” Mayo said today in a Bloomberg Television interview, referring to the chief executive officer of the New York-based bank. “What’s the first rule of contract law? Get it in writing. So yes, I do fault Jamie Dimon, JPMorgan and their legal staff for not giving them adequate protection.”

JPMorgan, the biggest U.S. bank, has tentatively agreed to pay a record $13 billion to end civil claims over its sales of mortgage bonds, a deal that won’t absolve the bank of potential criminal liability.

To contact the reporter on this story: Laura Marcinek in New York at lmarcinek3@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Christine Harper at charper@bloomberg.net

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