The $2 billion trading loss at JPMorgan Chase will claim its first casualty among top officials at the bank as early as Monday, with chief executive Jamie Dimon set to accept the resignation of the executive who oversaw the trade, Ina R. Drew. Ms. Drew, a 55-year-old banker who has worked at the company for three decades and serves as chief investment officer, had repeatedly offered to resign since the scale of the loss became apparent in late April, but Mr. Dimon had held off until now on accepting it, several JPMorgan Chase executives said.
Two traders who worked for Ms. Drew also planned to resign, JPMorgan Chase officials said. Her exit would mark a stunning fall from grace for one of the most powerful women on Wall Street, as well as a trusted lieutenant of Mr. Dimon.
Last year, Ms. Drew earned roughly $14 million, making her the bank’s fourth-highest highest paid officer. In an appearance on NBC’s “Meet the Press” on Sunday, Mr. Dimon sounded a contrite note: the famously confident, even cocky, executive repeated his apologies for the most embarrassing blunder of his eight-year tenure at the top of the largest bank in the United States. “There’s almost no excuse for it,” Mr. Dimon said about the trading loss that stemmed from a soured bet on credit derivatives made by the bank’s chief investment office in London. The bank was “sloppy” and “stupid,” Mr. Dimon said.
Chase CEO: We were 'dead wrong' to dismiss trading concerns
Executives said that within the last several months, Ms. Drew told traders at the bank’s chief investment office to execute trades meant to shield the bank from the turmoil in Europe. As the problems deepened on the Continent, Ms. Drew thought those bets could protect the bank from losses and even earn a tidy profit, these employees said.
But when market tides abruptly shifted in April and early May, Ms. Drew’s instructions to traders to scale back what had become a gigantic bet came too late to avoid racking up losses that could eventually exceed the current $2 billion estimate.
Ms. Drew isn’t the only one under fire for the bank’s blunder. Also under scrutiny is Bruno Iksil, the trader in London who gained notoriety last month as “the whale, “ because the positions he assembled were so large that they distorted corners of the complex market for credit derivatives.
A skilled trader who once said she relishes a crisis, Ms. Drew had become a liability for Mr. Dimon, whose announcement of the trading debacle shocked Wall Street last week, caused JPMorgan’s shares to plunge 9.3 percent in trading Friday
Ms. Drew had a steady ascent after she joined Chemical Bank, one of the predecessor companies at JPMorgan Chase, in 1982.
Former senior-level executives at JPMorgan said it was a shame that Ms. Drew has ended up suffering much of the fallout from the soured trade. They said that Thursday’s announcement of the $2 billion loss was the first real misstep that Ms. Drew has had and said that the position was not meant to drum up bigger profits for the bank, but rather to ensure that JPMorgan could continue to hold lending positions in Europe.
“This is killing her,” a former JP Morgan executive said, adding “in banking there are very large knives.” Another former executive said that the loss was unfortunately timed because it crystallized opposition to bank behavior and was being seized upon by regulators.
To appease regulators and shareholders, former executives said, Ms. Drew was clearly feeling pressure to resign. “The bank has taken bigger losses in investment banking and elsewhere, but because of the timing, she is being piled upon as this huge failure,”a former senior executive said.
This article, originally appeared in The New York Times.