This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

JPMorgan Targeted by SEC Over Trading Losses

NEW YORK ( TheStreet) -- The Securities and Exchange Commission is conducting a civil investigation into JPMorgan Chase's (JPM - Get Report) $2 billion derivatives loss, according to a New York Times report.

The SEC has opened a "preliminary investigation" of the bank's accounting practices and disclosures around the losses announced after Thursday's market close. The regulator's New York office will run the probe and review JPMorgan's trades and statements from executives running up to the Thursday's bombshell announcement, according to the Times report, which cited unnamed sources.

In an unscheduled conference call, CEO Jamie Dimon revealed that the bank's Chief Investment Office has suffered a trading loss of $2 billion in its synthetic credit portfolio, offset by a $1 billion securities gain, as a strategy to re-hedge its portfolio backfired. Dimon described the trades as "flawed, poorly reviewed, poorly executed" and reflected "sloppiness" and " bad judgment."

News of a JPMorgan trader holding large credit positions was first reported by Bloomberg on April 5. In an April 13 earnings call, Dimon dismissed the story as a "complete tempest in a teapot" and that it was executives' "job to invest our portfolio wisely and intelligently."

Dimon explained that he and bank management did not reveal losses during the conference call or subsequent meetings because of securities laws, citing Regulation Fair Disclosure (Reg FD), which governs how public companies communicate with analysts and investors.

In the conference call Thursday, Dimon apologized to analysts for not disclosing the losses. "A lot of us have met with analysts this week, buy-side and sell-side," Dimon said. "And we feel terrible because we obviously knew a lot, but because of FD we couldn't say anything."

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
JPM $61.50 0.00%
AAPL $109.27 0.00%
FB $88.26 0.00%
GOOG $600.70 0.00%
TSLA $241.93 0.00%

Markets

Chart of I:DJI
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASDAQ 4,683.9190 -49.5780 -1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs