The FBI has opened a probe into trading losses at JPMorgan Chase & Co, stepping up the pressure on the bank after the US Securities and Exchange Commission and the Federal Reserve said they were also looking into the wrong-way bets that led to the losses.
Yet, shareholders backed embattled chief executive Jamie Dimon at the bank’s annual shareholder meeting in Tampa, Florida, voting against a proposal to split the chief executive and chairman roles.
Though shareholders mostly gave Dimon a pass, pressure mounted on the bank to reclaim some of the millions of dollars it paid to the executives who oversaw the trades. Dimon saidJPMorgan would pursue more disciplinary action against those who were responsible. The timing on any such move was not clear, though, and the various regulatory probes could add complications. A source familiar with the FBI investigation, opened by the agency’s New York office, described it as being at a preliminary stage.
After two trading days of heavy losses, JPMorgan shares were up 3.9% to $37.20 in afternoon trade. Even so, the stock is down more than 8% since the trading losses were disclosed, wiping out $13.5bn of market capitalisation.
“It affects my opinion of the entire financial industry,” said Dennis Hong, principal with Altimeter Capital, a hedge fund that manages about $250m. “It’s really shocking because JPMorgan has been known as the most conservative in terms of managing their business risk,” Hong said.
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