Category: Companies / March 15, 2013 3:26 PM EDT
A former top JPMorgan Chase official blamed traders and managers who reported to her for bets that led to $6 billion in losses for the bank, telling lawmakers on Friday (March 15) that her team changed projected losses and hid important information from her.
Ina Drew, the former chief investment officer, said she does not believe she bears personal responsibility for the disastrous trading scheme that has been a black mark against the Wall Street bank.
"Some members of the London team failed to value positions properly and in good faith, minimized reported and projected losses, and hid from me important information regarding the true risks of the book," said Drew, who spoke softly but firmly about her role in the debacle.
Drew's comments kicked off a hearing into what has become known as the "London Whale" trades.
The Senate Permanent Subcommittee on Investigations released a report on Thursday that alleged the bank ignored risks, misled investors, fought with regulators and tried to work around rules as it dealt with mushrooming losses in that portfolio.
The report blamed Drew and other senior managers for doing little to rein in the risky trading.
Drew spent more than 30 years at the bank, and left it in May, after the bad bets became public.
"JPMorgan completely disregarded risk limits and stonewalled federal regulators. It is unsettling that a group of traders made reckless decisions with federally insured money and that all of this was done with the full awareness of top officials at JPMorgan. This bank appears to have entertained and indeed embraced the idea that it was quote "too big to fail,” said Senator John McCain.
The largest U.S. bank has long been seen as the safest and best-managed in the country, but the report could taint its reputation as well as that of its Chief Executive Jamie Dimon.
Video Source: Reuters