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Jamie Dimon Tells Employees To Gird Their Loins

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As you may have heard, the last number of months have not been so great for JP Morgan, legally-speaking. In addition to the London Whale fiasco, which the bank is still literally and figuratively paying for, there have been allegations of, well, take your pick: energy market manipulation, bribes for hires, playing it fast and loose with risky mortgage securities, and so on and so forth. The firm, which as of August 26th was cooperating with "at least seven separate probes" by the Justice Department, has stated that "future legal losses could be as much as $6.8 billion above its existing reserves," and last month, the guy tasked with handling "all litigation and government investigations" threw up his hands and said "Fuck it, I can't do this anymore."

To that end, earlier today, CEO Jamie Dimon sent out a memo to employees detailing the "unprecedented effort" the bank is going to right past wrongs, but warned them that they weren't out of the woods just yet.

“We are all well aware of the news around the legal and regulatory issues facing our company, and in the coming weeks and months we need to be braced for more to come,” Dimon said today in an e-mail to JPMorgan’s more than 250,000 employees.

JPMorgan, the largest U.S. lender, increased spending on internal controls by about $1 billion this year and dedicated more than $750 million “to address several of our consent orders,” Dimon said. At least 5,000 people at the New York-based company have been assigned to compliance, he said. The bank will pay at least $750 million to close regulatory investigations into its record London Whale trading loss last year, people familiar with the matter said this week. JPMorgan is operating under consent orders for previous violations that involved municipal bond trading, foreclosures, anti-money laundering practices and internal controls.

Obviously for legal reasons Dimon couldn't get into what sort of surprises are around the corner re: "legal and regulatory issues." But if the past is any indication, the sky's the limit and one cannot entirely rule out the possibility of:

  • A probe into a $10 billion loss by a Belgium-based trader known as the "Brussels Barracuda" among hedge funds and other traders.
  • A restraining order by Tom Brady and the New England Patriots. ("It started with a phone call.")
  • A suit by someone who Jimmy Cayne "owes money" from a while back. Not their fault but unfortunately their headache nevertheless.

Dimon Tells JPMorgan to Brace for More Regulatory Woes [Bloomberg]


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