WASHINGTON — JPMorgan Chase CEO Jamie Dimon held back showing federal regulators reports in May that revealed the bank had accumulated billions of dollars in trading losses, according to congressional testimony Friday from the firm’s former chief financial officer.
Douglas Braunstein, who is now a vice chairman at the bank, told the Senate Permanent Subcommittee on Investigations that Dimon did not submit the daily reports for two weeks because he was concerned about “confidentiality.”
Dimon ultimately acknowledged later that month that the firm had lost $2 billion on risky trades out of its London office. The losses have since been revised to more than $6 billion.
The Senate hearing was held a day after the subcommittee issued a scathing report that ascribed widespread blame for losses to key executives at the firm. The report said that the executives ignored growing risks and hid losses from investors and federal regulators.
After reading the report and hearing executives testify that they didn’t know who was responsible for informing regulators, members of the panel questioned whether the nation’s biggest bank had become too large to manage.
The “trading culture at JPMorgan … piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight and misinformed the public,” U.S. Sen. Carl Levin, D-Mich., the subcommittee’s chairman, said.
On Thursday, JPMorgan acknowledged it made mistakes but rejected any assertions that it concealed losses or risks. A spokesman declined to comment directly on the accusation that Dimon knew of the trading loss in April.
Dimon was not a witness at Friday’s hearing.
In April, news reports said a trader in JPMorgan’s London office known as “the whale” had taken huge risks that were roiling the markets. Dimon immediately dismissed the reports as a “tempest in a teapot” during a conference call with analysts.
But Dimon acknowledged the losses a month later. And he told a separate Senate committee in June that the bank showed “bad judgment,” was “stupid” and “took far too much risk.”