3 Chase execs expected to leave after bank lost $2 billion
JPMorgan Chase & Co is expected this week to accept the resignation of Chief Investment Officer Ina Drew after the bank lost $2 billion or more with a failed hedging strategy using derivatives, sources close to the matter said Sunday.
Two of Drew’s subordinates who were involved with the trades, Achilles Macris and Javier Martin-Artajo, are expected to be asked to leave, according to the people familiar with the matter.
Drew had repeatedly offered to resign after the bank discovered that its portfolio of derivatives tied to bonds was rapidly losing money and had grown too big to be quickly unwind, according to one of the sources. But the resignation was not immediately accepted because of her past performance at the bank.
Until the $2 billion loss was disclosed on Thursday night, Drew was considered in the industry to be one of the best managers of balance sheet risks.
She is one of the highest paid executives at JPMorgan, earning more $15 million in each of the last two years.
CEO Jamie Dimon said when he announced the loss Thursday that the bank had reacted badly to warning flags last month that it had large losses in financial derivatives trading.
Dimon said bank executives were “completely wrong” in public statements they made in April after being challenged over the trades in media reports, he said yesterday on NBC's “Meet the Press.”
“We hurt ourselves and our credibility [and we] fully expect to pay the price for that,” Dimon said, adding that the huge trading loss was not “life-threatening” to JPMorgan.