Courtesy of Pam Martens.
Jamie Dimon, between jobs and mansions in the late 90s, took up boxing. Here, he shadow boxes with Senate Banking on June 13, 2012.
For five solid years, the highs and lows of JPMorgan’s Chairman and CEO, Jamie Dimon, have been splashed across the headlines of the business press. First he was the Wall Street hero who came through the 2008 financial crisis unscathed. He sprinkled the phrase “fortress balance sheet” throughout his media interviews. He lectured Washington against over-regulating big banks (despite the fact they had just collapsed the largest economy in the world). He called international plans to require more bank capital reserves “anti-American.” He was the reigning King of Wall Street and he relished the limelight.
And then, in an instant, the King’s crown was tarnished. His glib tongue uttered the immortal words “tempest in a teapot” over outsized bets by his derivatives traders in London, only to have to eat back that phrase, letter by letter, billion by billion in reported losses over the next year.
When Dimon stopped reporting the losses on what became known as the London Whale episode, the loss tallied up to $6.2 billion. The scandal could not be squelched. The trades were made with deposits at the bank – not with the firms’ own capital. The regulators had been kept in the dark as the losses piled up. The trades were made in a highly risky, illiquid derivatives index and transacted in London, away from the dozens of bank examiners on site in New York.
Dimon was hauled before multiple hearings in Congress over the London Whale losses and used a feisty, sometimes arrogant tone. Lawsuits piled up showing the bank had not, in actuality, come through the financial crisis unscathed. As we reported last November, JPMorgan has shelled out over $16.1 billion in just the last three years for legal expenses, according to their SEC filings.
This week corporate media buzzed and titillated over whether JPMorgan investors would vote in favor of a shareholder proposal to effectively demote Dimon, stripping him of the Chairman title but leaving him as CEO. As insane as this sounds, the JPMorgan Board of Directors lobbied to keep Dimon firmly in control in both posts at the bank. CNBC reported yesterday that “Board members were dispatched to convince large investors to vote against the proposal. Some were strategically paired with investors over whom the board thought they might have the most influence. Executives held calls with big institutional clients.”
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