Originally pegged at $2 billion when the bank disclosed the blunder in May, the bad bets have renewed debates over financial regulations four years after the financial crisis, when risky trading on Wall Street helped bring the system to the brink.
The bank also announced its Chief Investment Office would no longer make the same types of bets that caused the losses.
“CIO will no longer trade a synthetic credit portfolio and will focus on its core mandate of conservatively investing excess deposits to earn a fair return,” Jamie Dimon, the bank’s chairman and chief executive, said in a statement.
JPMorgan said it made $5 billion, or $1.21 a share, in the second quarter, down from $5.4 billion, or $1.27, the same period a year ago.
JPMorgan also restated its first-quarter earnings by $459 million. In a filing with the U.S. Securities and Exchange Commission, the bank said it “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.”
“We don’t take it lightly,” Dimon said as a two-hour meeting with analysts began in New York.
In the analysts meeting, JPMorgan’s CFO added that the year-to-date losses from the bad trades have reached $5.8 billion.
©2012 Los Angeles Times
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