Botched trades by a unit of JPMorgan Chase & Co. that Jamie Dimon had pushed to boost profit were masked by weak internal controls and may ultimately saddle the bank with a $7.5 billion loss.
JPMorgan's chief investment office has lost $5.8 billion on the trades so far, and that figure may grow by $1.7 billion in a worst-case scenario, Dimon, the bank's chairman and chief executive officer, said today. Net income fell 9 percent to $4.96 billion in the second quarter, the bank said. It restated first-quarter results to reduce profit by $459 million after a review of the unit found employees may have hid souring bets.
By capping the size of the potential loss and revamping management of the businesses responsible, Dimon may help restore investor confidence after the bank's market value dropped $39.7 billion since April 5, when Bloomberg News first reported that the company had amassed an illiquid book of credit derivatives at the London chief investment office.
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