FBI to Probe JPMorgan Practices After Trading Loss

At an annual shareholders meeting in Florida Tuesday, JPMorgan CEO Jamie Dimon apologized for the company's recent losses and survived a pair of shareholder votes on his pay and job responsibilities. Judy Woodruff discusses the turmoil -- including news of an FBI inquiry of the company -- with Dawn Kopecki of Bloomberg News.

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    The CEO of J.P. Morgan Chase survived a pair of key shareholder votes today on his pay and job responsibilities. Jamie Dimon won an endorsement of his pay package, which was reportedly $23 million last year. He also can retain his second title as chair of the banking giant. Dimon formally apologized to investors at the annual meeting in Florida.

    Last week, Dimon disclosed the bank lost $2 billion on trading losses so far. Several news reports today also revealed that the FBI and the Justice Department are beginning their own investigation into the case.

    Dawn Kopecki of Bloomberg news is on the story. I spoke with her a little earlier from Florida, where she was covering the meeting.

    Dawn Kopecki, thank you for joining us.

    And before I ask you about the shareholders meeting there in Tampa, tell us what you know about this FBI investigation that I guess was disclosed today into the J.P. Morgan loss.

  • DAWN KOPECKI, Bloomberg News:

    Well, generally, when the Department of Justice and FBI get involved, it's generally because they suspect there's some sort of cover-up going on, especially this soon, you know, after the loss was disclosed.

    It's not likely that they were necessarily looking at this all that much before the loss was disclosed last week. Since it's the Department of Justice, it's a criminal investigation. And for criminal wrongdoing, they're generally looking at whether or not the company is misleading the public by what it knew when it knew it, or it's looking at whether or not the people involved in London misled the company or misled shareholders somehow with what they knew or tried to cover it up somehow.

    The other thing that could be a possibility is that the attorney general, Eric Holder, seizes the — is seizing the opportunity so he can look like he's tough on banks, so Obama can say he's tough on banks, especially Jamie Dimon and J.P. Morgan, who Obama has previously said and praised as being one of the best bankers in the United States.

    So the Obama administration looks tough on banks. They're more than likely looking at what the company knew, when they knew it, whether or not there is anything that they're covering up right now.


    And just quickly, Dawn, you had said to us earlier today something about a conference call that Jamie Dimon held with investors back in mid-April.


    Oh, yes. Yes, you know, Jamie Dimon on his analyst calls — I have been covering the company about two years now — and on his calls, he almost always cracks jokes. He almost always says someone asked a stupid question. He always goes off on government regulation.

    And in that call in mid-April, when Dimon says he didn't know how bad the trade was or didn't know that there was a problem, and was asked about it, he was uncharacteristically, you know, calm and quiet. He stuck to what seemed like kind of a scripted format.

    He was very — you know, he just wasn't himself. He wasn't himself on that call in mid-April. And that's after, it's shortly after everyone started reporting, you know, that this particular division had a big problem. So, that came — those stories came on April 5.

    We wrote a big story the day the earnings were announced on April 13. And, you know, that's the famous line where Dimon called it a tempest in a teapot. We now know that it was a lot more than just that.


    Well, let's talk about the shareholder meeting today now. What was said by management today? What did we learn that was new?


    You know, we actually didn't learn much of anything that was new.

    You know, we — you know, the company is sticking to a very prescribed, strict script here. They don't want to go off-script. Dimon didn't generally — didn't speak off the cuff at all like he generally does. It was a very subdued analyst meeting.

    They had very tight securities, you know, in place. There weren't that much protesters. Dimon apologized again. He said that they will take corrective action, meaning people will probably lose their jobs.

    We put out a story today saying that they are considering clawing back excess bonuses and stock grants from the — you know, the employees that were involved. So they are looking at trying to reclaim some of the pay for people who were rewarded for good results that may not have actually been producing that.


    Now, there was also — there was a vote taken today on whether to strip Dimon of his chairman of the board title.




    That didn't pass.




    It got, what, 40 percent?


    Yes. It got about 40 percent of the vote, which is about what it got last year.

    You have to remember that a lot of these votes were cast weeks ago, before this news came out. And so a lot of the people that were voting on it had no idea what was going on at the time. So, you have to take the vote with a grain of salt, but it did survive.

    Dimon did say — that is one thing that came out that was new. Dimon did say that the board has decided that so far, for now, they still want to keep him in the role of both chairman and CEO.


    And the mood of the shareholders overall, do they seem fine? What is their reaction to what's happened?


    You know, they're upset. They're upset. There were several impassioned, impassioned speeches made about this loss. A lot of people were asking Dimon about the mortgage mess, which is still a big, huge issue hanging around the company.

    Dimon said that the mortgage losses are still the number-one cause of losses on its balance sheet right now. And so people were upset. Generally, at these shareholder meetings, people come to air their grievances to the company. And you definitely heard a lot of that today.


    Dawn Kopecki, thank you very much.


    Thank you.