JPMorgan said today that it recently discovered information that suggests some individuals at the company may have been trying to avoid showing the full amount of the losses. All employees working on synthetic credit derivatives in the CIO have left the bank, the company said today.
Evidence of fraud within a bank is not just a fireable offense. It is also evidence of a criminal offense which must be investigated and acted upon.
Intentionally reporting bad marks isn’t something that one should brush under the rug. In addition it is clear that Jamie Dimon exercised insufficient oversight of an office that reported directly to him.
As Janet Tavakoli has opined today, and I agree, under any reasonable standard Jamie Dimon must be fired.
Further, it appears that a material mis-statement of results occurred and one thus cannot trust the former accounting statements until and unless they are gone through with a fine-toothed comb.
I know Dimon is somewhat of a “golden boy” among both regulators and the “cognescenti”, but that’s immaterial here. This is not a “rogue trader” who is three or four levels of management removed from the CEO’s office — it is literally a direct report that not only made “bad decisions” they appear to have attempted to intentionally hide the loss, and Dimon was directly responsible for supervision of that office and failed to exercise the appropriate level of oversight and diligence.
He must go.
(Never mind that it appears that investors think he’ll not only keep his job, but the bank will be rewarded for effectively “getting away with it” — the stock is up 3%.)
Disclosure: No position in JP Morgan.