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March 15, 2013

Senate Slams Bank on 'Whale'

“J.P. Morgan Chase & Co. brushed off internal warnings and misled regulators and investors about the scope of losses on its “London whale” trades last year, according to a scathing Senate report.

One risk gauge at the largest U.S. bank projected in February 2012 that the firm could lose $6.3 billion on the trades. But the warning was dismissed by a key risk manager as “garbage,” according to the 301-page report by the Senate’s Permanent Subcommittee on Investigations. The New York company’s trading losses ultimately exceeded $6 billion.

The report, the product of more than 50 interviews and a review of 90,000 documents, found that the bank ignored alarms triggered weeks and in some cases months before Chief Executive James Dimon dismissed concerns about them as a “tempest in a teapot” on an April 13, 2012, earnings conference call. “While we have repeatedly acknowledged mistakes, our senior management acted in good faith and never had any intent to mislead anyone,” J.P. Morgan said Thursday.”

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Read full Wall Street Journal article here

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