JP Morgan halves Jamie Dimon’s pay over $6bn London loss

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JPMorgan Chase & Co. (JPM), detailing lapses behind its biggest-ever trading loss, said employees were overwhelmed by the complexity of their bets, risk managers were ill-equipped and leaders including Chief Executive Officer Jamie Dimon weren’t aggressive enough in responding.

In a 129-page report issued yesterday, the bank described an “error prone” risk-modeling system that required employees to cut and paste electronic data to a spreadsheet. Workers inadvertently used the sum of two numbers instead of the average in calculating volatility. The firm also reiterated an assertion that London traders initially tried to hide losses that ballooned beyond $6.2 billion in last year’s first nine months.

The investigation, overseen by Dimon confidante Mike Cavanagh, is part of an effort to overhaul the bank and rebuild investor trust after the trading debacle helped cut shareholder value by as much as $51 billion last year. The report doesn’t explain why the chief investment office, a unit responsible for managing cash and mitigating risk, departed from more conservative strategies, eventually amassing a portfolio of complex credit derivatives. Dimon’s pay for last year was cut in half following the losses. Click below for full story - 

 IMAGE: Reuters