Justice Initiates Probe of JPMorgan Chase Trade Losses

The pressure keeps mounting on JPMorgan Chase as the Justice Department has joined a list of federal entities investigating the banking giant’s trading losses of $2 billion tied to credit derivative hedging.
The U.S. Securities and Exchange Commission and the Federal Reserve have said they are also looking into the trades.
Justice officials have launched a criminal probe, but it is unclear what laws may have been violated.
Meanwhile, JPMorgan Chase CEO Jamie Dimon today survived an attempt by some shareholders to strip him of his chairman’s title, citing fears the he may have too much consolidated authority.
But at their annual meeting in Tampa, shareholders voted to keep Dimon in his dual role of CEO and chairman.
Dimon also won a shareholder endorsement of his pay package for 2011, which totaled $23 million, according to an Associated Press analysis of regulatory filings. But most shareholder ballots on the pay package were cast before Dimon revealed the trading loss last week.
However, pressure mounted on Dimon to reclaim some of the millions paid to the executives who approved the trades. Dimon said JPMorgan would pursue disciplinary actions against those who were responsible.
“We will do the right thing. That may well include clawbacks,” he told reporters after the annual meeting.
Clawbacks refer to compensation that is taken back because of special circumstances. In the aftermath of the financial crisis, clawback policies have been extended to executives and supervisors who engage in excessive risk.
JPMorgan has already reshuffled its management team overseeing its hedge trading after the $2 billion loss. Ina Drew, who headed the Chief Investment Office, was forced out.

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