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Dimon Complacent Over Unit's Risk

JPMorgan CEO didnt apply same scrutiny to chief investment offices risk management.

By Erik Schatzker, Dawn Kopecki and Bradley Keoun, Bloomberg News | Updated on June 12, 2012

JPMorgan Chase & Co. could have spotted trouble at its chief investment office long before traders there racked up at least $2 billion in losses. One reason it didn’t: Chief Executive Officer Jamie Dimon.

Dimon treated the CIO differently from other JPMorgan departments, exempting it from the rigorous scrutiny he applied to risk management in the investment bank, according to two people who have worked at the highest executive levels of the firm and have direct knowledge of the matter. When some of his most senior advisers, including the heads of the investment bank, raised concerns about the lack of transparency and quality of internal controls in the CIO, Dimon brushed them off, said one of the people, who asked not to be identified because the discussions were private.

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