By David Henry
NEW YORK, June 13 John Hogan, who was named
chief risk officer at JPMorgan Chase & Co last year just
as its London Whale trades began racking up billions of dollars
of losses, may leave the company, CEO Jamie Dimon said on
Hogan will hold a new title of chairman of risk after
returning to work on Monday from a leave he started in January,
Dimon said in a memo to employees which was seen by Reuters.
Ashley Bacon, Hogan's deputy, will become chief risk officer.
When Hogan became chief risk officer in January 2012 he
inherited a dysfunctional risk management system, according to a
report by the U.S. Senate's Permanent Subcommittee on
Investigations. The report found that Hogan had no role in
approving the bad trades and that he was unaware of their size
and mounting losses before press reports about them in April of
The company disclosed one month later that the trades had
lost at least $2 billion. The disclosure set off intense
investigations by government and company officials of JPMorgan's
risk controls and whether some banks are too big to manage
Hogan worked on overhauling the risk systems under the
scrutiny of regulators. In November, Hogan's father died after a
long illness, according to a person close to the bank.
Hogan said in January that he had discussed the possibility
of a leave with Dimon and other executives before deciding
taking the action.
JPMorgan has lost, or reassigned, a number of top executives
since the London Whale debacle, which ultimately cost more than
$6.2 billion. Since last May, Dimon has replaced his chief
financial officer and investment banking chief, as well as the
head of the Chief Investment Office, where the London Whale
Dimon said in the memo on Thursday that Hogan will work with
Bacon for "several" months.
"We then hope he will stay at the firm in another senior
role, but he may choose to do something different outside of our
company," Dimon said. "John is a highly talented executive who
did a superb job as head of Risk when we needed him most."