(Source Jerry Kronenberg Boston Herald (MCT) — JPMorgan Chase CEO and Chairman Jamie Dimon will face angry investors today when the bank holds an annual shareholders’ meeting scheduled months ago, but convening days after the firm lost billions on risky trades.
“I definitely think he’s going to have a lot to answer for,” Morningstar analyst Jim Sinegal said, noting that Dimon was already facing a shareholder-activist proposal to take away his chairman’s title.
Dimon admitted late last week that some complex trades the bank made in an alleged attempt to reduce risk actually ended up losing $2 billion.
The news sent JPMorgan shares tumbling 12 percent in just two trading sessions. The firm’s chief investment officer, Ina Drew, also announced her “retirement” yesterday.
Credit Agricole Securities analyst Mike Mayo said the scandal “is certainly a big black eye for Dimon.”
A month ago, Dimon had dismissed rumors of trading problems as “a tempest in a teapot.” He had also been leading the charge against tough new Wall Street regulations that Congress passed in 2010 at the urging of U.S. Rep. Barney Frank (D-Newton).
Still, Tom Alonso of Macquarie Research Equities predicts Dimon will survive today’s vote “fairly easily, actually.”
That’s because JPMorgan weathered the 2008 market crash far better than most large Wall Street firms did, he said.
However, the scandal seems likely to factor into November’s elections as Democrats and Republicans debate how heavily to regulate business.
Dimon was reportedly a candidate to become President Obama’s Treasury secretary in 2009, but said on Sunday that he’s “barely a Democrat” today.
Obama countered in an interview that Dimon “is one of the smartest bankers we’ve got, (yet) they still lost $2 billion and counting.”
In Massachusetts, Democratic U.S. Senate candidate Elizabeth Warren called on Congress yesterday to revive 1933’s Glass-Steagall Act. The law kept commercial banks out of the investing business from the Great Depression until Congress repealed Glass-Steagall in 1999.
Brown’s opponent, Republican Sen. Scott Brown, argued for curbing Wall Street excesses by using Frank’s Wall Street reform law “to prevent banks from acting like casinos.”
Brown crossed party lines in 2010 to provide a deciding vote in favor of Frank’s proposal.
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