JPMorgan’s Weiland Tells Senate ‘Garbage’ Risk Remark Was ErrorDawn Kopecki and Zachary Tracer
Former JPMorgan Chase & Co. market-risk executive Pete Weiland told lawmakers he erred last year when dismissing internal loss estimates on botched trades as “garbage” before they proved prescient.
“Yes, I acknowledge it now, with all the information we have today, that was correct,” Weiland said today in testimony to the Senate Permanent Subcommittee on Investigations. The panel had quoted his “garbage” remark in a 301-page report yesterday on JPMorgan’s so-called London Whale bets, which lost $6.2 billion in last year’s first nine months.
As the trades soured in the bank’s chief investment office last February, an internal JPMorgan metric known as the comprehensive risk measure showed the portfolio might suffer a $6.3 billion annual loss, lawmakers found. Weiland was the unit’s chief market risk officer at the time.
“We got some CRM numbers and they look like garbage as far as I can tell,” Weiland wrote in an e-mail dismissing the estimates’ accuracy. He stepped down later in the year.
The CIO’s then-chief, Ina Drew, also doubted the accuracy of the estimates, the senators’ investigation found. By the time she believed it, “it was too late,” they wrote in their report.