NEW YORK ( TheStreet) -- JPMorgan Chase (JPM) said that it will restate its first-quarter earnings as a result of a an attempt to hide losses at its Chief Investment Office, a unit of the bank that invests excess deposits.
The nation's largest bank by assets also said it would restate first quarter earnings by $459 million, according to a filing with the Securities and Exchange Commission. In the first quarter, JPMorgan earned a profit of $5.3 billion on $26.7 billion in revenue.
"The firm has recently discovered information that raises questions about the integrity of the trader marks and suggests that certain individuals may have been seeking to avoid showing the full amount of the losses in the portfolio during the first quarter," JPMorgan said in the filing.
Previously, JPMorgan reported that the CIO unit had lost $2 billion with the prospect that losses could grow by billions more, as it worked to unwind the large position in illiquid credit derivatives. In second quarter earnings, the bank said its CIO losses now total $4.4 billion."As a result, we are no longer confident that the trader marks reflected good faith estimates of fair value at quarter end and we decided to remark the positions utilizing external "mid-market" benchmarks, adjusted for liquidity considerations." "
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