Here’s Why JPMorgan’s CFO is Saying Good-Bye
While JPMorgan (NYSE:JPM) executives deny that company Chief Financial Officer Douglas Braunstein has any culpability in the bank’s $5.8 billion trading loss, according to the Wall Street Journal, he is still expected to step down from his position over the next two quarters.
As sources close to the company told the Journal, Braunstein is likely to assume another role at the bank.
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His position at JPMorgan had already undergone changes; due to an executive rearrangement, Braunstein has reported to Matt Zames, the company’s co-chief executive officer, rather than the Chairman and Chief Executive James Dimon, since July.
Like many other executives at the bank, Braunstein has been scrutinized for his involvement in JPMorgan’s multi-billion-dollar trading loss in the first half of 2012. Now, multiple regulatory and law-enforcement agencies are inquiring into the internal accounting and risk controls at the bank.
Braunstein gave no hints of the problems at JPMorgan when he told analysts on an April 13 conference call that the bank was very comfortable with its “positions as they are held today.” He, and several other executives, repudiated initial reports about the London trader, now known as the “London whale,” whose large bets on the complex debt markets resulted in the losses.
In July, Dimon told the Senate Banking Committee that when he dismissed the reports, he was “dead wrong.” Now, Federal investigators are determining whether Dimon and Braunstein misled investors with their comments.
Braunstein is not the only executive to have his job affected by the government’s probe. Following the trading mess, a number of JPMorgan executives switched jobs or resigned, including regulatory-affairs chief Barry Zubrow, who said he would retire by the end of the year.
While the Journal’s sources are unsure what position Braunstein will assume next, it is suspected he will move into JPMorgan’s recently combined corporate and investment bank.
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