SEC asking if JPMorgan misled investors

SEC chairwoman Mary Schapiro told the House Financial

SEC chairwoman Mary Schapiro told the House Financial Services Committee Tuesday that her agency is looking into whether JPMorgan Chase misled its investors when it failed to divulge the risky trading that led to what is expected to be more than a $2 billion loss. With her at the hearing on Capitol Hill are, from left, Comptroller of the Currency Thomas Curry, Commodity Futures Trading Commission chairman Gary Gensler and Federal Reserve general counsel Scott Alvarez, (June 19, 2012) (Credit: Getty Images)

WASHINGTON -- Securities regulators are investigating whether JPMorgan Chase & Co. misled investors in its April earnings statement by failing to disclose a change in how it measured risk, Securities and Exchange Commission Chairman Mary Schapiro said on Tuesday.

"Part of what we are investigating is the extent of that disclosure and whether it was adequate, among other things," Schapiro told lawmakers Tuesday during a House Financial Services hearing.

By omitting the change from its earnings release in April, the bank disguised a spike in the riskiness of a particular trading portfolio by cutting in half its value-at-risk number.

Schapiro said that although companies are not required to disclose such a change in their earnings releases, other SEC rules still require such statements to be truthful and complete

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