May 18, 2012 in Business

JPMorgan CEO called to testify about losses

Kevin G. Hall McClatchy
 

Dimon
(Full-size photo)

WASHINGTON – The Senate Banking Committee on Thursday summoned JPMorgan Chase CEO Jamie Dimon to testify under oath about the huge losses his company suffered on an investment strategy that sank JPMorgan’s share price and heightened concerns about the efficacy of new regulations.

Sen. Tim Johnson, D-S.D., announced that Dimon would be called to testify sometime in June after the Senate Banking, Housing and Urban Affairs Committee, which Johnson chairs, has completed two hearings on the slow pace with which banking regulators are drawing up rules required by a 2010 law tightening regulation of the financial industry, informally known as the Dodd-Frank act.

The decision to call Dimon to testify came as evidence mounts that the bank’s losses on trades made out of its London office, originally estimated at $2.3 billion, now total twice that and are continuing to grow. Until now, the boyishly handsome Dimon had been considered the exemplar of good banking practices.

In a statement, Johnson said he and the banking committee’s ranking Republican, Sen. Richard Shelby of Alabama, had agreed that Dimon should be called to testify after their staffs had received briefings over the past week from regulators and JPMorgan on the trading losses. Johnson said the Dimon hearing and two others on banking regulation were “critically important and timely.”

“Our due diligence has made it clear that the Banking Committee should hear directly from JPMorgan Chase’s CEO,” the statement said.

JPMorgan spokeswoman Kristin Lemkau confirmed that Dimon would appear to testify.

“We will continue to be open and transparent with our regulators and Congress,” she said in an email to McClatchy.


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