JPMorgan: CIO Trading Loss Rises To $4.4 Billion
Created: 2012-07-16 09:48 EST
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JPMorgan Chase has revalued its 2nd quarter losses from its chief investment office (CIO) to $4.4 billion, increasing the amount lost due to a risky trading strategy involving derivatives.
The bank still reported a net income of $5 billion for the year, down 8.7% from last year.
JPMorgan had originally disclosed a $2.3 billion loss from the London-based CIO division in May, news that brought about the resignation of then-chief investment officer Ina Drew, as well as congressional hearings over the matter.
The division had engaged in a trades of derivatives meant to hedge other strategies.
However, “the way it was contrived between January to March, it changed into something I cannot publicly defend,” Chief Executive Officer Jamie Dimon said to the Senate at a hearing on June 13.
In a press release from today, Dimon said that the CIO had reduced its risk in synthetic derivatives.
The firm also mentioned that the maximum amount the bank could continue to lose from the trades were $1.7 billion.