JPMorgan Chase & Co. Chief Financial Officer Douglas Braunstein is considering leaving his position and may seek a role in the firm's investment bank, where he previously led deal making, according to a person with direct knowledge of the matter.
Braunstein, who was promoted to CFO in June 2010, is likely to remain in that role for at least several months, said the person, who requested anonymity because a decision on the move isn't final. The finance chief had reported to Chief Executive Officer Jamie Dimon until July, when Matt Zames, 41, became his boss and co-chief operating officer amid management changes in the wake of a $5.8 billion trading loss.
Braunstein, 51, didn't respond to a phone call seeking comment. The Wall Street Journal reported late yesterday that he is expected to leave his post.
The trading loss, tied to wrong-way bets on derivatives, is being reviewed by agencies including the Federal Bureau of Investigation, Securities and Exchange Commission, the U.K. Financial Services Authority and the U.S. Senate Permanent Subcommittee on Investigations. An internal probe showed traders in London priced their books “aggressively” and may have tried to hide the full extent of their losses, the company has said.
The FBI is focusing its inquiry on four former London-based executives in the bank's chief investment office, where the loss occurred, and the bureau could make arrests in the next several months, the New York Times reported late yesterday, citing officials briefed on the case.
London Whale
The newspaper said the FBI is scrutinizing former JPMorgan traders including Bruno Iksil, nicknamed the London Whale because his wagers were big enough to move the market, as well as his boss, Javier Martin-Artajo, and former Europe CIO head Achilles Macris.
A lawyer for Macris, 51, declined to comment and an attorney for Iksil didn't respond to requests for comment, according to the New York Times. Greg Campbell, a lawyer for Martin-Artajo, said his client “is confident” that he will be cleared of wrongdoing after a “fair reconstruction of these complex events is completed,” the newspaper reported.
Joe Evangelisti, a JPMorgan spokesman, declined to comment.
A series of personnel changes stemmed from the botched bets, starting with the resignation in May of Chief Investment Officer Ina Drew, 56, less than a week after Dimon, 56, disclosed the trading loss. Her exit was followed by that of Iksil, Martin-Artajo and Macris.
Two senior managers last week also disclosed that they intend to leave the company. Irene Tse, 43, who ran the CIO for North America under Drew, told employees that she's resigning and people familiar with the matter have said she plans to start a hedge fund. Former Chief Risk Officer Barry Zubrow, 59, who runs JPMorgan's lobbying operation, announced Oct. 5 that he will retire at year-end.
JPMorgan is scheduled to report third-quarter results tomorrow before U.S. markets open. The lender may say net income climbed 14 percent to $4.87 billion, according to the average estimate of 13 analysts surveyed by Bloomberg.
Bloomberg News
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