Dimon faces more questions over $2B trading loss

By Marcy Gordon

Associated Press

Published: Tuesday, June 19 2012 9:46 a.m. MDT

WASHINGTON — JPMorgan Chase CEO Jamie Dimon returns to Capitol Hill Tuesday to face more questions from lawmakers over a $2 billion-plus trading loss incurred by the bank.

Dimon is testifying before the House Financial Services Committee. The hearing also featured testimony from federal regulators, who are investigating the risky trades that led to the loss.

Dimon told the Senate Banking Committee last week that he was aware of the trading strategy used by the investment operation that suffered the loss but that he didn't approve it.

He said the bank made a mistake and that senior banking executives responsible for the loss will probably have their pay taken back by the company.

The loss disclosed last month has raised concerns that the biggest banks still pose risks to the U.S. financial system, less than four years after the financial crisis erupted.

The Securities and Exchange Commission is examining whether JPMorgan's earnings report on April 13 gave adequate information on the risk model the bank was using.

Chairman Mary Schapiro told the House panel "there could be" violations that would merit legal sanctions against the bank. Schapiro also said it wasn't clear whether Dimon failed to speak truthfully when he dismissed reports of the trading loss in a conference call with analysts in April as "a tempest in a teapot."

U.S. Comptroller of the Currency Thomas Curry, whose agency is a key regulator of JPMorgan, told the panel that the loss appeared to be caused by "serious risk management weaknesses or failures at the bank."

Curry made similar remarks earlier this month at a Senate hearing.

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