NEW YORK -- Todd Sears was just a little over a week into his first job on Wall Street more than a decade ago when his boss, a managing director, called a colleague "a f------ faggot" right in front of him. Sears, who had just graduated from Duke University, had been openly gay since freshman year. He was so rattled by the comment -- the fact that a supervisor had used that sort of language so casually -- that he decided to do something he hadn’t done since high school: pretend to be straight. "My first thought was, Oh my God, I have to get back in the closet quick." He made up a girlfriend and pretended to be straight, but the ruse was painful, ... Continue reading →

That didn't take long. Less than a week after JPMorgan Chase disclosed massive trading losses, investors who own bank stock have filed three different lawsuits alleging that bank officers failed to disclose information about the bad trade, which led to a sharp decline in the share price. The shareholder suits, filed in U.S. District Court in Manhattan this week, claim that the bank misled investors ahead of its surprise announcement last Thursday that it lost $2 billion. "The suits are going to pile up and pile up fast," said Dennis Kelleher, CEO of Better Markets, a nonprofit focused on financial reform. "It's no surprise that there are lawsuits, and there are going to be many more because in April, the CFO and CEO said that ... Continue reading →

To Brooksley Born, JPMorgan Chase's trading blowup looks a lot like the Long-Term Capital Management debacle of 14 years ago. It's "happening all over again," Born told The Huffington Post on Monday. "We have to learn from these experiences, and we don't seem to be doing it yet." Born, head of the Commodity Futures Trading Commission from 1996 to 1999, was one of the earliest observers to warn about the dangers of unregulated derivatives. She was thwarted in her efforts to impose regulation in the late 90s despite the cautionary tale of LTCM, a hedge fund that needed a government bailout in 1998 after making risky bets on credit derivatives and government bonds. As a Public Citizens report released Monday, "Forgotten Lessons of Deregulation: Rolling ... Continue reading →

At the annual JPMorgan Chase shareholders meeting on Tuesday morning in Tampa, Fla., CEO Jamie Dimon offered what amounted to a spirited defense of the bank’s efforts to lobby against stiffer financial regulation. “Our interest is the same as yours, make [the financial system] strong and sound,” Dimon said during a question and answer session. “Financial services has the right, like anybody else, to be engaged in the process. I personally think that collaboration would lead to better outcomes, not worse outcomes.” The comments followed opening remarks in which Dimon once again apologized for the bank's $2 billion loss on risky bets on credit derivatives. It also comes just days after reports surfaced that JPMorgan has engaged in fierce lobbying efforts aimed at watering down ... Continue reading →

To Brooksley Born, JPMorgan Chase's trading blowup looks a lot like the Long-Term Capital Management debacle of 14 years ago. It's "happening all over again," Born told The Huffington Post on Monday. "We have to learn from these experiences, and we don't seem to be doing it yet." Born, head of the Commodity Futures Trading Commission from 1996 to 1999, was one of the earliest observers to warn about the dangers of unregulated derivatives. She was thwarted in her efforts to impose regulation in the late 90s despite the cautionary tale of LTCM, a hedge fund that needed a government bailout in 1998 after making risky bets on credit derivatives and government bonds. As a Public Citizens report released Monday, "Forgotten Lessons of Deregulation: Rolling ... Continue reading →

In this July 12, 2011 photo, JPMorgan Chase and Co. Manhattan headquarters in New York is shown. (AP Photo/Bebeto Matthews) The Associated Press NEW YORK (AP) -- Three high-ranking executives at JPMorgan Chase are expected to leave their jobs this week after a trading blunder cost the bank $2 billion, The Wall Street Journal reported Sunday. The Journal, citing people familiar with the situation, reported that one of the executives is Ina Drew, who for seven years has run the risk-management division at the bank responsible for the loss. The other two identified by the newspaper are an executive in charge of the London desk that placed the trades and a managing director on that team. The bank did not immediately return a message from ... Continue reading →

Peter Castelli, a vice president with JP Morgan, works in his firm's booth on the floor of the New York Stock Exchange Friday, May 11, 2012, a day after JPMorgan disclosed a huge trading loss. If you thought Wall Street had learned its lesson four years after the global financial crisis, JPMorgan Chase's $2 billion trading debacle suggests you should think again, investment bankers and industry experts say. To some, it suggests that the need for financial reform is still just as urgent as it was the day the crisis broke out. The revelation on Thursday that JPMorgan had lost about $2 billion (with possibly more losses to come) from risky bets on opaque derivatives at a London trading desk shows that at least some ... Continue reading →

JPMorgan Chase CEO Jamie Dimon. Turns out there's a problem with the bank's London Whale. JPMorgan Chase has suffered big, unexpected losses at a closely watched trading desk, providing fodder to supporters of a new financial regulation the bank's CEO has loudly opposed. The biggest U.S. bank by assets said on Thursday that it had lost $2 billion in a bet on credit derivatives, made by a London office, run by a man traders have alternately dubbed "The London Whale" and "Voldemort." The desk is intended to hedge the giant bank's credit risk, not increase it. In recent months, news reports had alleged the desk was engaged in speculative trading, not hedging. Critics used the reports as evidence of the need for the "Volcker Rule," ... Continue reading →

The problem with banks being too big to fail is not necessarily their bigness, but their failure. Like a runaway train plowing through a city block, a failing big bank can destroy everything around it. If only there was a way to let a giant bank crash on its own without bothering anybody! Actually, it would be better to not have big banks at all. But it's anti-American to think that way. So the crafters of the Dodd-Frank financial reform act have tried to make it so that a failing big bank can be gently put to sleep while the rest of us get on with our lives, rather than panicking and shelling for a costly bailout. The responsibility for keeping things running smoothly the ... Continue reading →

Jamie Dimon addressed Monday's Fortune 500 dinner. JPMorgan Chase CEO Jamie Dimon took the opportunity at Monday evening's Fortune 500 dinner to hail American business and trash its critics. Speaking at the New York Stock Exchange event, Dimon bemoaned what he called the "constant attack on business" and suggested that the economy should have added twice as many jobs in the past two years. "American business has added 4 million jobs in the last 24 months," Dimon said. "That's not government jobs, and I don’t think government policy had anything to do with it. It should have been 8 million." Over a dinner of ahi tuna and seared fillet of beef, Fortune magazine marked the release of its latest Fortune 500 list. Dimon spoke on ... Continue reading →