JPMorgan Execs Knew of 'Whale' Risks
Concerns about London unit raised years before $2B loss
By Rob Quinn,  Newser Staff
Posted Jun 12, 2012 5:51 AM CDT
The fall in JPMorgan shares after news of the loss surfaced has wiped more than $27 billion off its market value.   (AP Photo/Mark Lennihan)

(Newser) – Top JPMorgan execs weren't as blindsided as you might have thought about the risky trades that cost the bank a couple of billion dollars, the Wall Street Journal finds. Insiders in the unit responsible for the losses say that worries about risk-taking by London traders—including the one known as the "London whale"—began as far back as 2010. The unit's chief risk officer created a plan to roll back some risky positions but it was never followed correctly, according to the sources, who say CEO Jamie Dimon was aware of some of the London group's risky trades and spoke to the traders involved.

Dimon plans to testify before Congress about the loss tomorrow. Bankers say authorities are over-reacting to the loss, although some analysts believe it should present a warning about large, unwieldy lenders. "Even a great banker like James Dimon can’t really manage such a huge operation," a financial historian tells Bloomberg. "They convince themselves that everything is fine because they’re making money."
 

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