This Day On The Street
Continue to site right-arrow
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

JPMorgan Hearing 'More Smoke Than Fire': Analyst

Stocks in this article: JPMGS

NEW YORK ( TheStreet) -- JPMorgan Chase's (JPM) Senate subcommittee hearing will probably generate plenty of negative headlines, but it is unlikely to have much impact on the stock, according to a report from KBW analyst Brian Gardner.

On Friday, the Senate Permanent Subcommittee on Investigations led by Senator Carl Levin (D., Mich) will question officials from the bank on the "London Whale" trade that caused more than $6 billion losses last year.

The subcommittee's report released Thursday afternoon said the bank officials ignored warnings about the increasing riskiness of the trades in its synthetic credit portfolio and misled investors and regulators about the scope of its losses. For more on the report's findings read Senate Report Details JPMorgan Trading Abuses .

Ina Drew, who oversaw the trades, will be testifying for the first time. Former CFO Doug Braunstein and former risk managers at the unit will also appear before the committee.

Still, the Senate hearing is likely to be "more smoke than fire" according to Gardner's report Friday, as there has been "significant disclosure" about the trades already. CEO Jamie Dimon has already testified twice before Congress and the management has been questioned on the issue at various earnings calls and conferences over the past year.

The analyst draws a comparison to the subcommittee's 2010 hearing on Goldman Sachs regarding its Abacus deal. The investment bank was taken to task for selling securities with little or no disclosure that they were created by hedge fund investor John Paulson, who was betting against them.

"In both situations, most of the bad news is already known by the market and priced in prior to the hearings," the analyst wrote in the report.

"In Goldman 's case, the SEC had announced on April 16, 2010 that it was charging the firm with fraud and the complaint filed by the SEC provided much of the information that would be raised at the congressional hearing. The biggest sell-off in Goldman related to this matter was on April 16 and not at the April 27 congressional hearing," says the analyst. On the day of the hearing, Goldman's shares actually eked out a small gain and was up 2.5% the day after.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs