The whole London staff of JPMorgan Chase & Co. (JPM )’s key investment company is at risk of termination as the first executive departures are prompted by a $2 billion trading loss as quickly as this week, a person knowledgeable about the situation said. Ina Drew, who manages the unit, resigned today, the bank said in a record. Paul Evangelisti, a bank spokesman, said before her departure was announced that Drew would have no opinion. While the organization is evaluating whether anyone in the unit, which employs a few dozen people in London, sought to hide dangers, there isn’t yet evidence that’s the case, one of many people said.
Chief Executive Jamie Dimon, 56, announced the loss May possibly 10, assailing his firm’s managing of trading in synthetic credit securities as “flawed, complex, badly reviewed, poorly executed and badly monitored.” Initially, he resisted taking Drew’s resignation, the person said. The event has given ammunition to proponents of stricter bank laws. Dimon “has to clarify the management changes that have to occur to make certain that a company line has been drawn under this,” said Christopher Wheeler, a London-based specialist at Mediobanca SpA. Shares of the company have lost more than 11 percent because the May possibly 10 statement of the loss.
They dropped 1.9 percent in NYC at 10:40 a.m., to $36.24. Drew, 55, is among two women on the operating board at JPMorgan, the greatest and most successful U.S. bank. Her office runs about $360 million, the difference between money from deposits and what the bank gives. Dimon had encouraged her product to improve earnings by buying higher-yielding assets, including structured credit, shares and derivatives, in an expansion of risk-taking led by Achilles Macris, ex-employees said in April.
Macris, 50, and a dealer on his staff, Javier Martin-Artajo, also are making the New York-based organization with Drew, the Wall Street Journal described recently, citing the unidentified people. Macris and Martin-Artajo didn’t answer messages left outside of normal business hours.