Ex-JPMorgan executive tries to dodge harpoon of "whale" losses

Fri Mar 15, 2013 6:26pm EDT
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By Emily Flitter and Aruna Viswanatha

WASHINGTON (Reuters) - Ina Drew, the former JPMorgan Chase & Co executive who earned millions while in charge of the unit that made the disastrous "London whale" trades, refused on Friday to accept responsibility for the $6.2 billion in losses revealed last year.

Testifying before a Senate panel, the former chief investment officer instead pointed a finger at the traders and managers below her. They did not appear at the hearing because they are in London and outside the Senate's jurisdiction.

Blame-shifting proved to be a theme of the hearing held by the Senate Permanent Subcommittee on Investigations, even as Chairman Carl Levin hit Drew and other current and former JPMorgan executives hard over past statements he believed to be inaccurate.

The litany of accusations by the powerful panel raises the prospect that the trading debacle will continue to legally dog the Wall Street bank, long considered one of the best managed.

Friday's hearing and a subcommittee report released on Thursday paint a damning picture of a bank and high-level employees raking in huge payouts while ignoring risks, deceiving investors, fighting with regulators and trying to work around rules as losses mushroomed in a derivatives portfolio.

Drew made $29 million in 2010 and 2011, and Achilles Macris, who supervised the trading book at issue and reported to Drew, made $32 million during the same time frame. They were among the highest paid JPMorgan employees in those years.

Drew, who resigned last May and was long a trusted lieutenant of Chief Executive Jamie Dimon, lamented the loss of her 30-year-career at JPMorgan and defended herself as a "reasonable and diligent" manager.

"Some members of the London team failed to value positions properly and in good faith, minimized reported and projected losses, and hid from me important information regarding the true risks of the book," Drew said.   Continued...

Ina Drew, former Chief Investment Officer of JP Morgan Chase Bank, testifies before the Senate Homeland Security Investigations Subcommittee in Washington March 15, 2013. REUTERS/Gary Cameron