JPMorgan faces FBI investigation, lawsuits
The FBI confirmed Wednesday it has opened a "preliminary" investigation into a $2 billion US trading loss at the biggest U.S. bank, JPMorgan Chase.
The head of the Bureau, Robert Mueller, told a U.S. Senate Judiciary Committee in a hearing on FBI oversight that how long the investigation takes "will depend on a number of factors," and did not comment on what possible legal violations might be involved.
The bank disclosed the loss last week, reporting that it resulted from the use of complex financial derivatives in a strategy that was intended to protect itself from the risk of default on certain loans on its books. It said a further loss of $1 billion was expected by the end of June.
The U.S. Securities and Exchange Commission has also said it is focusing on JPMorgan’s loss, without giving further details of whether an investigation would be conducted.
JPMorgan CEO Jamie Dimon yesterday faced criticism from investors at its annual shareholders’ meeting over the loss, but held onto his pay and his position as chairman.
Also on Wednesday, shareholders of the bank filed two lawsuits against it, accusing it and its leaders of taking excessive risk and causing the loss.
The lawsuits, filed in New York, claim JPMorgan changed its risk model without telling investors. They say the shift led to the losses and claim company leaders misled investors.
One suit was filed by California shareholder James Baker. A second was filed by shareholder Arizona-based Saratoga Advantage Trust's financial services portfolio.
JPMorgan Chase declined to comment.
With files from The Associated Press