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"The workers did it" is becoming the new "I can't recall." Former JPMorgan (JPM -2%)...

"The workers did it" is becoming the new "I can't recall." Former JPMorgan (JPM -2%) CIO Ina Drew blames traders and managers who reported to her for bets that led to $6B in losses, telling senators that her team changed projected losses and hid information from her. Drew defends her oversight as "reasonable and diligent" and says she shouldn't be held personally responsible for the losses.
Comments (16)
  • did anyone notice when sen levin asked who was responsible for not forwarding information to the occ he asked the wrong people.
    every report I ever sent to a regulator had to be signed or have a cover letter. He should have gotten the answer from the occ or maybe be its the area within the occ who said wamu was ok 3 months before
    the were given to Chase
    15 Mar 2013, 11:48 AM Reply Like
  • It is the new American Way, starting with the president, that nobody is ever held personally responsible.
    15 Mar 2013, 11:51 AM Reply Like
  • WYOSTOCKS

     

    It really annoys me that you are right
    15 Mar 2013, 12:38 PM Reply Like
  • For info, Senator Levin is the only senator in attendance of today's hearing. He is single handedly carrying the session and asking all the questions.

     

    Shows how much either the democrats or republicans give a damn about the whole issue.

     

    Pretty sad.
    15 Mar 2013, 01:26 PM Reply Like
  • It is very sad. I grew up thinking the US system of government was a great example to the world of conscientious men and women guarding the country and protecting taxpayers.

     

    Maybe I watched the wrong movies.
    16 Mar 2013, 09:20 AM Reply Like
  • Mr. Smith Goes to Washington? That's about as accurate as 1960s air brushed innocent Playboy bunnies are to today's tattooed STD-filled pornstars. Sad but true. There's one and only one reason pols take office: it's called 'rent seeking' and it translates to a huge resume booster when and if they leave office. They follow the money.
    16 Mar 2013, 01:07 PM Reply Like
  • Please....... Ina Drew was paid over $25 million over the last two years. She is supposed to know what is going on. You can be sure that if her group posted a $6 billion profit, she would be first in line taking all the credit. Here's hoping that her bonus money that is still owed is clawed back completely. She does not deserve a penny.
    15 Mar 2013, 01:17 PM Reply Like
  • Ina Drew took one for the JPM team. She will be rewarded for this action, no doubt. She is probably enjoying a dinner with Jamie Dimon tonight.

     

    Another Dog and Pony Show that no elected officials care about. MSM does not bother to cover things like this anymore. "Critical information" was kept from regulators by Jamie Dimon and he is not present at the latest show.

     

    What a waste of time and money.
    15 Mar 2013, 07:28 PM Reply Like
  • Totally, in fact I'd expect the regulators to join the dinner as well. Good laugh and steak for everyone involved, and they'll charge it to the deal as usual.

     

    Ina D for Best Actress!!!
    16 Mar 2013, 10:15 AM Reply Like
  • No Vegas casino would give any player the kind of leverage to place bets the TBTFs use every day .
    16 Mar 2013, 01:34 PM Reply Like
  • $6B that could have bought a lot of houses in Cali!
    16 Mar 2013, 08:37 PM Reply Like
  • i hate to say it, but Ina Drew's claims sound quite reasonable. To me it sounds liek the "whale" fellow counted on being able to bully other traders into adopting JPM's view (trading strategy) by the shear weight of the huge dollars he put behind it. He obviously realized he had made a mistake much sooner than he started to correct it. He had just as obviously bullied other traders using JPM's might before. This time his bully tactics did not work. It is easy to believe he kept his exact tactics from Ina Drew. It is unlikely she would have signed off on what amounted to "poker bluff raises" in the later stages of the trade.

     

    Of course, you can always argue that it was still her responsibility to keep better watch on such people as the whale; and it was. The problem is that micromanaging people with 150+ IQ's usually doesn't work very well. Instead she would have had to make clear from the start that thsi type of "bluff with the weight of JPM behind you" behavior would not be tolerated at all. I don't think she did this.
    17 Mar 2013, 03:02 AM Reply Like
  • David, if I agree with your arguments, which I don't, then you present a good argument why the big TBTF banks should be broken up because they are unmanageable.

     

    Also, stopping some guy in a foreign office from taking wild bets with billions of dollars of the banks money is hardly what any manager of any company in the world would call "micromanaging people".

     

    Obviously you have never managed any sort of large organization.
    17 Mar 2013, 10:23 AM Reply Like
  • wyostocks:
    Your insults are mis-placed. I essentially said that she could not be expected to go over ever trading decision with him as he made it. This is true whether or not you choose to believe it. I further said that he likely kept details from her (effectively lied to her) in order to pursue his own agenda, which to my mind amounted to a poker bluff. I believe he had been successful in "bluffing" before by using the weight of JPM's huge assets (raising the stakes hugely to put fear into otehr traders). I believe he was just doing the same thing again. Few managers will try to rein in a big money maker. They will not tell them they have to be superised on every little aspect of a trade. Many of their trades are big. If the WHALE guy kept some his outlandish "bluffing" from Ina Drew, she would have had no real way of knowing.

     

    If this were indeed the case, she would only have been able to really prevent this by effectively saying she would fire anyone who was ever caught (in a later audit) doing such a thing, even if that trade was successful. I don't believe she had made this clear enough. In that sense, I think she failed as a manager. I strongly believe that the WHALE had bluffed before many times successfully. Yet he had not been reined in?

     

    When you decry my management experience, you are merely pointing out your ignorance about big bank trading. Think back to a few years ago when the big banks were manipulating the world's oil prices. That was incredibly pricey. Yet only a few traders from JPM, GS, et al were actually involved.

     

    There have since been many rule changes in order to prevent much of thsi manipulation; but I think you can get the idea.
    17 Mar 2013, 11:30 AM Reply Like
  • David

     

    No insults were intended. Sorry you took my comments as such.

     

    I merely pointed out that managers all over the world have responsibilities for far flung organizations and in effectively doing their jobs, they don't have to micromanage in order to insure that the corporate interests are properly served.

     

    You claims in support of Ms. Drew merely showed that you obliviously have never held such a position.
    17 Mar 2013, 11:58 AM Reply Like
  • wyostocks:
    I admit that I have never held a position as high up in a multi-national as Ms. Drew. However, I have worked for multi-nationals, and I do know how easily and how often middle managers often hide things from upper management. In fact it is more a rule than an exception that middle managers will mislead upper management. Often upper management will automatically allow for a certain amount of this in their planning. I should add that I have been friends with people who have held such high level management positions. We will just have to agree to disagree.
    17 Mar 2013, 03:14 PM Reply Like
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