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Senate report details JPMorgan's clashes with regulator
WASHINGTON, March 14 |
WASHINGTON, March 14 (Reuters) - JPMorgan Chase & Co frequently clashed with its main regulator as the bank's losses from bad credit trades mounted last year, a Senate report said.
The dysfunctional relationship between JPMorgan and the Office of the Comptroller of the Currency, which oversees the regulated bank subsidiary of JPMorgan's holding company, went all the way to the top of the bank, according to the report.
In January and February, JPMorgan Chief Executive Jamie Dimon ordered the bank to stop sending daily trading profit and loss reports to the OCC, according to the report from the Senate's Permanent Subcommittee on Investigations, citing the OCC's main JPMorgan examiner.
A spokeswoman for JPMorgan declined to comment.
The bank told the OCC that it was stopping the reports because they provided too much information, as well as to prevent the leak of data, the report said. When the OCC asked for the data again, Chief Financial Officer Doug Braunstein provided it. The profit and loss reports stopped for less than a week, according to the Senate report.
At a later meeting, when Dimon learned that Braunstein had resumed supplying the reports to regulators, the CEO shouted at the CFO in anger, the report said, citing the OCC examiner.
Braunstein stepped aside as chief financial officer earlier this year to become a vice chairman at JPMorgan. The long-time investment banker was replaced by Marianne Lake, previously CFO of the bank's retail branch network.
The bank frequently pushes back on OCC findings and examinations, according to the report. At one point, bank employees yelled at OCC regulators and called them "stupid." In early 2012, when a junior OCC examiner went to a meeting that he thought would be with his counterpart at the bank to discuss the results of an examination, he was instead met by all the heads of risk divisions of the bank, who criticized the OCC's findings in a "loud" and "combative" tone, the report said, citing an interview with the examiner.
JPMorgan Chase loss more than $6 billion last year after making a series of wrong-way bets in credit derivatives markets.
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