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JPMorgan Loss May Total $7.5 Bln

Botched trades were masked by weak internal controls.

By Dawn Kopecki and Michael J. Moore, Bloomberg | Updated on July 13, 2012

Botched trades by a unit of JPMorgan Chase & Co. that Jamie Dimon had pushed to boost profit were masked by weak internal controls and may ultimately saddle the bank with a $7.5 billion loss.

JPMorgan’s chief investment office has lost $5.8 billion on the trades so far, and that figure may grow by $1.7 billion in a worst-case scenario, Dimon, the bank’s chairman and chief executive officer, said today. Net income fell 9 percent to $4.96 billion in the second quarter, the bank said. It restated first-quarter results to reduce profit by $459 million after a review of the unit found employees may have hid souring bets.

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