JPMorgan Chase & Co. will fight “till the end” anyone who sues claiming they were misled over more than $6.2 billion in losses at the chief investment office last year, Chief Executive Officer Jamie Dimon said.
“There was no hiding, there was no lying, there was no bulls----ing, period,” Dimon said today at a conference sponsored by Morgan Stanley in New York.
While he conceded the company made some mistakes, “no one at JPMorgan Chase, not one single solitary person, from CIO, to risk, to finance, to myself -- and a lot of people looked at it -- thought we had a big problem” when the bank reported earnings on April 13, 2012, the day Dimon dismissed news reports about the trade as a “complete tempest in a teapot,” he said. Executives thought they had losses that might cost about $200 million, Dimon said, “not a $6 billion problem.”
The trading book had already lost more than $1 billion by that time, according to documents turned over to the U.S. Senate Permanent Subcommittee on Investigations, which released a 301-page report in March that accused the largest and most profitable U.S. bank of hiding losses, deceiving regulators and misinforming investors.
Dimon, 57, said the New York-based company would vigorously defend against lawsuits tied to the losses. “Anyone who sues, we’re going to fight that one till the end, too, by the way,” he said. “So keep that in mind.”
Dimon made the remarks after Betsy Graseck, a Morgan Stanley analyst moderating the event, asked how he views the variety of information available on the trade in a Senate subcommittee report and bank’s own reviews.
The Senate panel said in March that the bank dodged regulators and misled investors amid souring bets by trader Bruno Iksil, dubbed the London Whale because his positions were so big. Managers manipulated risk models and traders valued positions favorably to obscure mounting losses, according to the report.
“CEOs have a fiduciary duty to the stockholders to consider the facts presented in litigation and respond reasonably,” said Erik Gordon, a business and law professor at the University of Michigan in Ann Arbor.
Gordon said Dimon might be taking a more aggressive stance after having defeated a shareholder initiative last month that asked the bank to name an independent chairman to oversee the CEO. The proposal received 32 percent of the votes, and Dimon was re-elected as chairman.
“He is feeling his oats after winning his re-election battle,” Gordon said.
Even with the loss, JPMorgan reported a record $21.3 billion in profit last year, more than any other U.S. lender. Its stock has advanced 63 percent in the past 12 months, making it the third-best performer in the 24-company KBW Bank Index.