Dimon says JPMorgan was honest with shareholders

Tue Jun 19, 2012 5:05pm EDT
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By Sarah N. Lynch and David Henry

WASHINGTON (Reuters) - JPMorgan Chase & Co Chief Executive Jamie Dimon insisted his bank was upfront with investors about its recent multibillion-dollar trading loss, as regulators examine whether JPMorgan hid a dramatic rise in risk-taking.

Dimon, appearing on Capitol Hill on Tuesday for the second time in a week, again apologized for the loss but declined to accept personal responsibility, including the notion that he should offer to have his pay docked.

"My compensation is 100 percent up to my board," Dimon told the House Financial Services Committee. "They will do what they see as appropriate... I can't tell my board what to do."

Dimon on Tuesday mounted a defense against potential allegations of wrongdoing, saying he relied upon the people around him when in April he dismissed as a "tempest in a teapot" media reports that a London-based JPMorgan trader had amassed an outsized position that prompted hedge funds to bet against it.

It was not until May 10 that Dimon revealed on a conference call that the London office had so badly botched a hedging strategy that it had so far produced $2 billion in losses.

During the call, he divulged for the first time that the Chief Investment Office in London had changed its internal models in way that had understated its risk-taking.

"We disclosed what we knew when we knew it," Dimon told lawmakers on Tuesday.

He also said he believed it to be true when he certified JPMorgan's annual regulatory filing in February that said the bank had adequate risk controls in place.   Continued...

Jamie Dimon, chairman and CEO of JPMorgan Chase & Co, testifies before a House Financial Services Committee hearing on "Examining Bank Supervision and Risk Management in Light of JPMorgan Chase's Trading Loss" on Capitol Hill in Washington June 19, 2012. REUTERS/Kevin Lamarque