JPMorgan Chase & Co., the biggest U.S. bank, shouldn’t re-nominate three risk committee members after disclosing more than $6.2 billion in losses on derivatives trades last year, CtW Investment Group said.
CtW will oppose the re-election of David Cote, Ellen Futter and committee Chairman James Crown because they “lack professional experience relevant to overseeing risk management at a large financial institution that undertakes significant trading activity,” the investment firm said today in a letter to New York-based JPMorgan.
The so-called London Whale trades were the subject of a report this month by the U.S. Senate Permanent Subcommittee on Investigations, which found that Chief Executive Officer Jamie Dimon, 57, misled investors and dodged regulators as the losses mounted. The bank “piled on risk” and “ignored limits on risk-taking,” said committee Chairman Carl Levin, a Michigan Democrat.
“Both regulators and JPMorgan Chase senior executives recognize that serious deficiencies in risk-management practices and internal controls have existed for some time and require prompt corrective action,” CtW wrote in the letter.
Cote, 60, is chairman and CEO of Honeywell International Inc., and Crown, 59, is president of Chicago-based Henry Crown & Co. and lead director of defense contractor General Dynamics Corp. Futter, 63, a former president of Barnard College in New York, joined JPMorgan’s board in 1997.
Joe Evangelisti, a JPMorgan spokesman, declined to comment on the letter. Rob Ferris, a spokesman for Cote at Honeywell, didn’t immediately comment. Futter and Crown didn’t immediately return messages seeking comment.
In August, JPMorgan assigned former KPMG International Chairman Timothy Flynn to its risk committee after an internal probe blamed lax controls for the trading loss.
The Wall Street Journal reported on CtW’s letter earlier today.