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by Derek Loosvelt | August 14, 2013


Yesterday it was just a rumor but today it became official: the U.S. has filed criminal charges against two ex-JPMorgan traders in connection with a controversial trading position/scandal commonly referred to, for its largesse, as the London Whale. The position (a trade in credit derivatives) went extremely south last year and so far has cost JPMorgan more than $6 billion. What the U.S. is alleging is that the two traders attempted to hide the losses and in the process committed wire fraud and falsified bank records. (Note: neither of the two who’ve been charged are the actual Whale himself; Bruno Iksil, the dude who took the position, has agreed to rat out his former coworkers and won’t be charged). The U.S. also plans to file civil charges against JPMorgan (the bank itself) in connection with the case and last week indicated that it’s not going to take a “neither admitting nor denying guilt” as an answer and instead will attempt to get JPMorgan to say uncle, which is to say the U.S. will attempt to get a rare admission of wrongdoing from a Wall Steet firm. 

All of which is pretty poor news if your name is Jamie Dimon and you hold (if only by a thread) the positions of CEO and chairman of JPMorgan Chase. Already, you’ve had a rather sour year, having to take the stand and answer heated questions posed to you by several of your hotheaded so-called elected officials about why the Whale lost so many billions of dollars and why nothing was done to rein in his trade. Not to mention the fact that your shareholders voted to slash your compensation by 50 percent, meaning that somehow you now have to survive on a measly $11 million a year. And then this: criminal charges against some of your former employees. And this after you made a lot of incredibly bold statements to anyone who would listen such as: “There was no hiding, there was no lying, there was no bull$h!tt!ng, period," and, quoting Cicero and at least one former Prime Minister of Great Britan, “[This whole Whale deal is nothing but] a tempest in a teapot.”

In fact, it’s not only been a stormy year, it's been a stormy few years. Not so long ago, as you no doubt recall, you were best buds with the leader of the so-called free world, the guy you used to chug beers with and refer to as Barry. But that was before you started screaming “NO MORE REGULATION!” everywhere you went (even in your sleep, according to some rumors). Then came the London Whale swimming your way before beaching himself, and it became obvious to Barry and his buds on the Hill that regulation was sorta kinda perhaps a good idea after all (incidentally, I wonder where Paul Volcker is summering this year?). 

However, there is a silver lining to this ever-darkening cloud that’s covering the blue-blooded sky in your blue-suited world. And that is this: your employees still love you. That’s right, your underlings still have a lot of respect for you, from the analyst level all the way up to the EVP and MD levels (but not to the CIO level; unfortunately, you sacked the last lass who held that spot and so she has no more love for you; but wait, she’s no longer with the firm so she doesn’t count!). In any case, your current employees approve of your work and so you must be doing something right. Very right.* 

Consider exhibits A through F below, all of which come from the latest Vault Banking Survey (the full results of which will be released exactly three weeks from today, so check back then to see if your firm, JPMorgan, held on to the No. 1 spot in the Vault Banking 50) and all of which are actual, direct quotes from just over a handful of your employees: 

EX. A: “Jamie and his senior leadership team drive culture at J.P. Morgan. They’re hardworking and honest, which is emulated throughout the bank.”

EX. B: “Jamie Dimon remains the strongest leader in the financial sector. J.P. Morgan employees are very proud to have him as CEO despite London Whale incident.” 

EX. C: “Having Jamie Dimon at the helm gives me a lot of confidence in the stability and direction of our firm.” 

EX. D: “Leadership is very strong—who hasn’t heard of Jamie Dimon?—and most employees revere and trust the management, which allow a thriving culture of ‘doing the best you can’ and make sure that your efforts are rewarded.” 

EX. E: “Financial services is becoming increasingly regulated. It’s starting to feel like the utility sector. But we have the best leader in the sector in Jamie Dimon and that gives the employees great confidence.” 

EX F.: “It's true, we really do have a lot of confidence in Jamie Dimon. The guy’s a rock star.” 

And so, to summarize the answer to the question originally posed several inches above, it seems clear that: no, the honest, hardworking, hard-rocking chief of JPMorgan Chase will likely not lose his swagger. At least not according to the employees whose checks he still signs.


*There's also the fact that your firm is still racking up billions of dollars in profits (second quarter 2013 net income rose 32 percent to $6.5 billion) but we'll discuss that at a later date, perhaps right after JPMorgan Chase pays the U.S. to settle the Whale case.

Follow me @vaultfinance.

Read More:
Government Charges Two Former JPMorgan Employees (DealBook)
Fab Fab Tourre and Wall Street’s Ongoing Image Crisis
Dimon, Blankfein, or Gorman: Which CEO Sounds Most Like a CEO?
Jamie Dimon is HUGE in Japan


Filed Under: Finance|Workplace Issues

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