JPMorgan Unit’s London Staff May Go as Loss Prompts Exits
The entire London staff of JPMorgan Chase & Co. (JPM)’s chief investment office is at risk of dismissal as a $2 billion trading loss prompts the first executive departures as soon as this week, a person familiar with the situation said.
Ina Drew, who oversees the unit, resigned today, the bank said in a statement. Joseph Evangelisti, a bank spokesman, said before her departure was announced that Drew would have no comment. While the firm is examining whether anyone in the unit, which employs a few dozen people in London, sought to hide risks, there isn’t yet evidence that’s the case, one of the people said.
Chief Executive Jamie Dimon, 56, announced the loss May 10, assailing his firm’s handling of trading in synthetic credit securities as “flawed, complex, poorly reviewed, poorly executed and poorly monitored.” Initially, he resisted accepting Drew’s resignation, the person said. The incident has given ammunition to proponents of stricter bank regulations.
Dimon “has to clarify the management changes that have to take place to ensure that a firm line has been drawn under this,” said Christopher Wheeler, a London-based analyst at Mediobanca SpA.
Shares of the company have lost more than 11 percent since the May 10 announcement of the loss. They dropped 1.9 percent in New York at 10:40 a.m., to $36.24.
Drew, 55, is one of two women on the operating committee at JPMorgan, the biggest and most profitable U.S. bank. Her office oversees about $360 billion, the difference between money from deposits and what the bank lends. Dimon had encouraged her unit to boost earnings by buying higher-yielding assets, including structured credit, equities and derivatives, in an expansion of risk-taking led by Achilles Macris, ex-employees said in April.
Macris, 50, and a trader on his team, Javier Martin-Artajo, also are leaving the New York-based firm with Drew, the Wall Street Journal reported yesterday, citing the unidentified people. Macris and Martin-Artajo didn’t respond to messages left outside of regular business hours.
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