SEC Piles on JPMorgan
JPMorgan’s (NYSE: JPM) stock has sunk more than 16% since it disclosed a more than $2 billion derivatives trading loss earlier this month.
Now, the U.S. Securities and Exchange Commission (SEC) is investigating the timing and accuracy of the firm’s financial reporting.
“Our focus right now is on whether the company’s public disclosure and financial reporting is accurate in light of what the press has teed up as what did they know and when did they know it,” Chairman, Mary Schapiro, told a senate banking committee.
The SEC didn’t have direct oversight of the credit derivatives trades that took place in London, outside of the regulated brokerage.
Furthermore, Schapiro said banks are required to disclose changes to risk models – addressing reports that JPMorgan quietly changed to its value-at-risk model. That allowed the trading portfolio to appear safer than it was, and resulted in riskier bets.
More hearings are will be held on JPMorgan’s trading loss this summer, with CEO, Jamie Dimon, likely to testify before Congress.
Related Topics: Economy and Politics, U.S.
