JPMorgan Chase & Co lost $15 billion in market value and a notch in its credit ratings on Friday while a chorus of regulators and politicians reacted to its surprise $2 billion trading loss by demanding stiffer oversight for the banking industry.
The loss by one of Wall Street’s most respected banks embarrassed chief executive Jamie Dimon, a leader lauded for steering his bank through the fallout from the 2008 financial crisis without reporting a loss.
“We know we were sloppy. We know we were stupid. We know there was bad judgment,” Dimon said in a television interview on Sunday. He said it wasn’t clear whether the bank had broken any laws or violated any rules. “We’ve had audit, legal, risk, compliance, some of our best people looking at all of that.” The loss also invited regulatory scrutiny for a man who had all but led the charge to limit it, criticising the so-called Volcker rule to ban proprietary trading by big banks.
The reports say that the Securities and Exchange Commission has opened a preliminary investigation into JPMorgan’s accounting practices and public disclosures about the trading loss.
Fitch Ratings cut JPMorgan’s debt ratings a notch and put all of the ratings of the bank and its subsidiaries on negative ratings watch. Standard & Poor’s put JPMorgan and its banking units on a negative outlook, but affirmed its current ratings.
A national union urged shareholders to approve a stockholder resolution calling for an independent board chairman at JPMorgan. Dimon currently holds the chairman and CEO titles.