Handsome Jamie Dimon, Pronounced, What Else? Diamond!

Dimon: 'I can't publicly defend the trade'

By Maureen Farrell @CNNMoney
Invest June 13, 2012: 11:47 AM ET


JPMorgan Chase CEO Jamie Dimon answered questions from the Senate Banking Committee Wednesday.
NEW YORK (CNNMoney) -- JPMorgan Chase Chief Executive Jamie Dimon told Senators on Capitol Hill Wednesday that he cannot defend the trades that led to the bank's massive multi-billion loss.

"The way it was contrived between January to March, it changed into something I cannot publicly defend," Dimon told members of the Senate Banking Committee during a two-hour hearing.

When asked by Democratic Sen. Sherrod Brown whether he personally approved the trade, Dimon said: "No, I was aware of it, but I didn't approve it."

Dimon refused to call the intent of the trade anything other than a hedge to offset other potential risks to the bank. He refused to say that the bank was using trades from its chief investment office to make money.

Democratic Sen. Bob Menendez, one of the few committee members to grill Dimon, asked: "So this transaction that you said morphed -- what did it morph into? Russian Roulette?"

Dimon responded: "It morphed into something that I can't justify. It was just too risky for our company."

JPMorgan didn't understand the risks


JPMorgan CEO Jamie Dimon testified before Congress on Wednesday.
Dimon also said he was not aware of the problems with the trade or the extent of the loss when he called news reports of massive losses from the bank's derivatives positions a "tempest in a teapot" during an April 13 call with analysts.

"When I made that statement, I was dead wrong," said Dimon.

While Dimon wouldn't defend the trades, JPMorgan's CEO repeatedly called the $2 billion loss "purely management's mistakes," refusing to yield any blame to regulators or the bank's internal risk management team. "It would have been very hard for regulators to catch this," he said.

Dimon also said it was very "likely" that executives from the firm's chief investment office would be subject to so-called clawback provisions that would allow the bank to take back pay from the past two years. Dimon said he's waiting for the bank to wrap up its investigation of the trade before determining which executives could be subject to clawbacks.

Dimon, who has been an outspoken critic of Dodd-Frank financial system reform signed into law in 2010, refused to acknowledge that the legislation had made the financial system any safer. When pushed on the question, he would only say, "I don't know."

JPMorgan (JPM, Fortune 500) announced last month that it had suffered a multi-billion dollar loss on trades built around contracts tied to corporate bonds that were originally intended to hedge the bank's exposure.

While losses appear to be mounting, Dimon stressed that the incident was "an isolated event" and that overall, JPMorgan remains "solidly profitable" in its second quarter.


Since Dimon first announced the losing trades on May 10, JPMorgan has lost roughly $30 billion of its market value. Shares of JPMorgan have dropped nearly 20% during that same time period.

Dimon will return to Capitol Hill next week to field questions from members of the House of Representatives.

CNNMoney's Charles Riley contributed to this report.

First Published: June 13, 2012: 11:13 AM ET

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Handsome JPMorgan Chase Chief Executive Jamie Dimon -- pronounced "Diamond", appropriately for a billionaire!
At first I thought it was pronounced "Demon"...Cute, but a demon nonetheless.