Ina Drew, a 55-year-old banker who has worked at JPMorgan Chase & Co for three decades and is the chief investment officer, has offered to resign and will step aside Monday, said several bank executives, according to The New York Times.
Drew, one of the highest-paid officials at JPMorgan Chase, oversaw the division of the bank responsible for the loss.
Reuters reports that two of Drew’s subordinates who were involved with the trades, London-based Achilles Macris and Javier Martin-Artajo, are expected to be asked to leave this week too.
“Ina is an amazing investor,” said a money manager who knows Drew, but who refused to be quoted by name. “She’s done a really good job over a lot of years. But they only remember your last trade.”
The departures appear after the unit Ina Drew runs, the Chief Investment Office, mismanaged a large portfolio of derivatives tied to the creditworthiness of bonds. The portfolio included layers of instruments used in hedging that became too complicated to work and too big to unwind quickly in the esoteric, thinly traded market.
Following the loss, Elizabeth Warren, a Massachusetts candidate for U.S. Senate, called for JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon to resign his position as a director at the Federal Reserve Bank of New York, tells Bloomberg.
“We need to stop the cycle of bankers taking on risky activities, getting bailed out by the taxpayers, then using their army of lobbyists to water down regulations,” Warren said. “We need a tough cop on the beat so that no one steals your purse on Main Street or your pension on Wall Street.”
“After the biggest financial crisis in generations, the American people are frustrated that Wall Street has still not been held accountable and does not appear to consider itself responsible,” she said.
“Dimon should resign from his post at the New York Fed to send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability.”
The losses have marred JPMorgan’s reputation for risk management, prompted a downgrade in its credit ratings and thrown an unflattering spotlight on Dimon, who had become perhaps America’s best-known banker and a cavalier critic of increased regulation.
The trading loss forced Dimon to apologize on NBC’s Meet The Press on Sunday.
“This is a stupid thing that we should never have done, but we’re still going to earn a lot of money this quarter, so it isn’t like the company is jeopardized,” Dimon said during the interview. “We hurt ourselves and our credibility, yes — and that you’ve got to fully expect and pay the price for that.”
According to The Huff Post, Dimon said he did not realize the extent of the problem when he said in April that the concerns were a “tempest in a teapot.”
“We got very defensive. And people started justifying everything we did,” Dimon said. “We told you something that was completely wrong a mere four weeks ago.
JPMorgan lost $15 billion in stock market value the day after the announcement of the loss. Dimon also said the bank is open to inquiries from regulators. He has promised to get to the bottom of what happened and learn from the mistake.