JPMorgan Execs Knew about Risks

    People walk past the JP Morgan Chase  Building on Park Avenue  May 15, 2012 in New York.  The US Justice Department has opened an investigation into JPMorgan Chase's more than $2 billion trading loss that the Wall Street bank announced last week, media reports said Tuesday.       AFP PHOTO  TIMOTHY A. CLARY        (Photo credit should read TIMOTHY A. CLARY/AFP/GettyImages)

    Timothy A. Clark, AFP / Getty Images

    Executives at JPMorgan knew about the risk practices of some London-based traders well before they lost the company more than $2 billion earlier this year. As early as 2010, discussions were underway about how to restrict the London traders. That year, the London-based traders lost $300 million in a matter of days on a foreign exchange-options trade, but without any gains to offset the loss. Despite the concerns, the risky trades continued. By April of this year, the London traders raised concerns again when they made a large bet on the value of corporate credit indexes.  On April 13, Chief Executive Jamie Dimon called the concern over the trades a “tempest in a teapot” though he has since admitted to being “dead wrong.”

    Read it at The Wall Street Journal