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May 21, 2013

Return of the king: Dimon survives

Turns out it’s not so easy to humble a titan.

“JPMorgan Chase chief executive Jamie Dimon on Tuesday handily beat back an effort by shareholder activists to force him to give up his second role as chairman of the nation’s largest bank. The failed effort to strip Dimon of the dual roles came after a series of major regulatory problems for the bank. And it underscores the difficulty — both for angry shareholders and Washington policymakers — of taking any significant new steps to crack down on Wall Street.

The effort to strip Dimon of the chairman title, led by union giant AFSCME and supported by some prominent shareholder advisory firms, garnered just 32.2 percent of the vote, according to preliminary tallies. That was down from last year, when a similar nonbinding measure received 40 percent of the vote in the immediate aftermath of the “London Whale” trading scandal, which saw JPMorgan lose $6.2 billion.

The Dimon vote is a setback for regulatory reform advocates and some members of Congress who want fresh measures to break up what they call “too big to fail” banks. And they say the reason Dimon survived — by banking huge profits for his company — demonstrates that the biggest firms on Wall Street have unfair financial advantages over smaller competitors. The big banks still pose a threat to the system, these critics say, and could require more massive bailouts.”

“’Dimon and the bank’s arguments that JPMorgan’s performance should make everyone vote for him is the ultimate arrogance,’ said Dennis Kelleher of reform group Better Markets. ‘JPMorgan and all of Wall Street had record profits and performance in the years leading up to the 2008 financial collapse, which inflicted the worst economy on the U.S. since the Great Depression. That’s why JPMorgan and Wall Street’s other ‘too big to fail’ banks need boards and other executives that aren’t handpicked by an imperial CEO and who aren’t rubber stamps for the CEO.’

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