JPMorgan suspends stock buybacks

JPMorgan Chase chief executive Jamie Dimon said Monday that the bank had suspended repurchases of its stock, but is maintaining its dividend, while working down losing trades in credit derivatives.

Shares of JPMorgan were down 1 percent at $33.13 in morning trading after Dimon started speaking at the Deutsche Bank Securities Global Financial Services Investor Conference in Manhattan.

The bank announced on May 10 that it had lost at least $2 billion mishandling a portfolio of credit derivatives. During the weekend reported estimates were as high as $5 billion.

JPMorgan won permission from the U.S. Federal Reserve in March to spend as much as $12 billion buying back stock this year and another $3 billion early next year.

Dimon said the bank was holding back on buybacks to make sure it stays on its planned “glide path” to reach minimum capital requirements being imposed under so-called Basel 3 standards.

In April, Dimon had indicated in a letter in the company's annual report that buybacks at prices for less than about $45 a share were good for stockholders.

The stock has lost nearly $30 billion of market value since the loss was announced.

On Sunday, Bloomberg News reported that Irvin Goldman, who oversaw risks in the JPMorgan Chase & Co. unit that suffered at least $2 billion in trading losses, had been fired in 2007 by another Wall Street firm, Cantor Fitzgerald, for money-losing bets that prompted a regulatory sanction, three people with direct knowledge of the matter said.

JPMorgan appointed Goldman in February as the top risk official in its chief investment office while the unit was managing trades that later spiraled into what Dimon called “egregious,” self-inflicted mistakes. The bank knew when it picked Goldman that his earlier work at Cantor led regulators to penalize that company, according to a person briefed on the situation.

JPMorgan's oversight of risk in its chief investment office has become a focal point as U.S. authorities examine the incident and lawmakers debate how to prevent banks from making wagers that might endanger depositors, Bloomberg News said.