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Published: Tuesday, 5/15/2012 - Updated: 2 years ago

JPMorgan's investment chief to leave

MARKETWATCH
James Dimon, chairman and CEO of JP Morgan Chase & Co., speaks in New York. JPMorgan Chase, the largest bank in the United States, said that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money. James Dimon, chairman and CEO of JP Morgan Chase & Co., speaks in New York. JPMorgan Chase, the largest bank in the United States, said that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money.
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NEW YORK — The banker who ran JPMorgan Chase & Co.'s chief investment office, which incurred a trading loss of more than $2 billion, has decided to retire, becoming the first high-ranking casualty in a scandal that has dented the bank's reputation and prompted fresh calls for tighter financial regulation.

Shares of JPMorgan Chase closed Monday down 3.2 percent at $35.79, after having slumped more than 9 percent on Friday.

Before the stock market opened, the bank said in a statement that Ina Drew would retire as chief investment officer. She has been at the firm more than 30 years. Her departure had been widely expected after her office suffered a roughly $2 billion trading loss, disclosed Thursday.

JP Morgan's statement did not specify terms of Ms. Drew's retirement. The Wall Street Journal reported Sunday that she may receive $14.65 million of accelerated equity awards, depending on the terms of her departure. Her compensation may be spotlighted at JPMorgan's annual shareholder meeting today.

Ms. Drew, 55, reportedly is one of the highest-paid women on Wall Street.

JPMorgan said that Ms. Drew will be replaced by Matt Zames, co-head of global fixed income in the company's investment bank and head of capital markets in the mortgage bank.

Mike Cavanagh will oversee a team studying the firm's trading loss, which resulted from a soured hedge on credit derivatives. The bank is still in the process of unwinding these trading positions, so the total loss is not known.

In a statement, Jamie Dimon , the bank's chairman and chief executive officer, praised Ms. Drew for her work, saying: "Despite our recent losses in the [chief investment office], Ina's vast contributions to our company should not be overshadowed by these events."

Mr. Dimon has been a leading opponent of increased regulation of the banking industry. He said Monday that his bank is "very strong and well capitalized."

"We will learn from our mistakes," he added.



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