JPMorgan Chase CIO Ina Drew Resigns
By BILL McGUIRE and KEVIN DOLAK
Ina Drew, the chief investment officer at JPMorgan Chase and one of the top women on Wall Street, resigned today in the wake of the firm's $2.3 billion in-house trading loss.
JPMorgan said in a statement today that Matt Zames, currently co-head of Global Fixed Income in the Investment Bank and head of Capital Markets within the Mortgage Bank, will take on Drew's role. The bank is very strong and well capitalized, CEO Jamie Dimon said in the statement.
Drew, 55, for the past seven years had led the trading division at the bank. A trader known as the "London Whale" Bruno Michel Iksil is also said to be leaving. Drew, who made $14 million last year, offered to resign after the disclosure of the firm's loss May 10, which could top $4 billion.
"Ina Drew has been a great partner over her many years with our firm. Despite our recent losses in the CIO, Ina's vast contributions to our company should not be overshadowed by these events," Dimon said in the statement.
The executive in charge of the London desk that executed the bungled trades, and the team's managing director are the other two executives expected to leave the firm, AP reported.
Late last week CEO Dimon said the trading loss was an "egregious" failure in a unit managing risks.
The loss reportedly came within the last six weeks and resulted from trading in so-called credit derivatives. By the closing of the markets on Friday, roughly 10 percent of the firm's stock price was lopped off. JPMorgan Chase is the largest bank in the Unites States.
"There were many errors, sloppiness and bad judgment," Dimon said. "These were grievous mistakes, they were self-inflicted."
Congress and the FDIC have been grappling with how to prevent "too big to fail" institutions from taking big risks knowing that the U.S. Treasury is there to back them up.
The Securities and Exchange Commission has started an early stage review into the loss, according to the Wall Street Journal.
"It's important to remember that our company is very strong and well capitalized, with leading franchises across our businesses. We maintain our fortress balance sheet and capital strength to withstand setbacks like this, and we will learn from our mistakes and remain diligently focused on our clients, who count on us every day," Dimon said in today's statement.
Speaking on ABC News' "This Week" on Sunday, Rep. Barney Frank, D-Mass., said that he hopes the still-forming Volcker Rule - which would place limits on certain speculative proprietary trading - would prevent the type of behavior that JP Morgan Chase engaged in.
"I hope that the final rule will prevent this," said Frank, who is an author of the Dodd-Frank financial reform bill.