FBI opens inquiry into JPMorgan losses
A JPMorgan building in Manhattan. News agencies Tuesday reported that the New York office of the FBI is conducting a preliminary investigation into the bank's $2 billion loss in a risky investment. (May 14, 2012) Credit: AP
The FBI has opened an inquiry into the multibillion-dollar trading losses at JPMorgan Chase, stepping up pressure on the bank.
The news did little to spook investors, who sent the stock higher Tuesday, or shareholders, who backed embattled chief executive Jamie Dimon at the bank's annual shareholders meeting, with a vote rejecting a proposal to split the jobs of CEO and chairman.
Though investors 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 said JPMorgan would pursue more disciplinary action against those responsible.
"We will do the right thing. That may well include clawbacks" of their compensation, he told reporters after the annual meeting.
The timing on any such move was not clear, though, and various regulatory probes could add complications. A source familiar with the situation said Tuesday that U.S. and U.K. regulators first raised concerns with senior management last month.
A separate source familiar with the FBI probe, opened by the agency's New York office, described it as preliminary. The probe was seen in some quarters as a necessary public step, given the ongoing debate in Washington about bank regulation, and one expert said it raised the level of concern around what happened.
After two trading days of sharp declines, JPMorgan shares rose 1.3 percent to close at $36.24. The stock is down more than 11 percent since the trading losses were disclosed, wiping out slightly more than $17 billion of market capitalization.
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