JPMorgan boss hits back over 'unfair' Bear Stearns lawsuit

Oct 11, 2012

We did you a favour rescuing Bear Stearns, Jamie Dimon tells US government

Getty Images

JAMIE DIMON, chief executive of JPMorgan Chase, has lashed out at the US government over a lawsuit alleging wrongdoing relating to mortgage-backed securities at Bear Stearns before it was rescued by JPMorgan four years ago.

According to Reuters, Dimon said the company was still paying the price for doing the government "a favour" by rescuing the "teetering" financial giant in early 2008.

"I'm going to say we've lost $5 billion to $10 billion on various things related to Bear Stearns now. And yes, I put it in the unfair category," Dimon said. "Let's get this one exactly right. We were asked to do it. We did it at great risk to ourselves ... Would I have done Bear Stearns again knowing what I know today? It's real close."

Civil legal problems related to the financial crisis are not Dimon's only problem. The New York Times reports US authorities are using taped phone conversations to build criminal cases related to the $6bn derivatives trading loss at JPMorgan Chase's London office earlier this year.

Attention is focused on four people: Javier Martin-Artajo, a manager who oversaw the trading strategy; Bruno Iksil, aka "The London Whale", who placed the doomed bet; Achilles Macris, a senior investment executive and a low-level trader, Julien Grout.

The Feds are focusing on calls and communications in which the four allegedly discuss how to value the bad bets in a favourable way.
Investigators are also looking into whether records were falsified to hide the problems from executives in New York and if, based on those records, the bank submitted inaccurate financial statements to regulators.

The paper reports investigators could make arrests in the coming months, though no current or former employees have yet been accused of wrongdoing.

Reuters reports that Dimon conceded yesterday he should have caught the Whale. "We made a stupid error," he said. "I should have caught it ... I didn't."

Sign up for our daily newsletter