Dimon Apology
JPMorgan CEO Jamie Dimon apologized for a trading loss of at least $6.2 billion at his New York-based bank. As head of the biggest and most profitable U.S. lender, he also was the highest paid of his Wall Street peers, awarded $23 million in pay and bonuses for 2011. He was one of the most aggressive defenders of his industry against politicians and regulators, having publicly mocked U.S. Treasury Secretary Timothy F. Geithner, challenged Federal Reserve Chairman Ben S. Bernanke and faulted former Fed Chairman Paul Volcker.
“We have let a lot of people down, and we are sorry for it,” Dimon, 56, told the Senate Banking Committee on June 12 about the loss at a JPMorgan unit that the bank said was supposed to invest the firm’s own money and hedge its risk.
At least four senior executives have left the company or been reassigned since the loss was revealed in May.
No Sympathy
Morgan Stanley CEO James Gorman, 54, said last month that scandals such as Adoboli’s trading loss have made it difficult to improve the industry’s reputation. He said employees should stop complaining about lower pay.
“There’s not a lot of sympathy,” Gorman said at a Nov. 29 Securities Industry and Financial Markets Association conference in New York. “The rest of society is going through at least as difficult a time from a much lower starting base.”
The industry’s lack of popular support was evident at the polls this year. Wall Street employees gave more money to Mitt Romney’s presidential campaign than to President Barack Obama’s, only to see voters re-elect Obama. Elizabeth Warren, a Democrat who has championed tougher oversight of banks, defeated Republican U.S. Senator Scott Brown in Massachusetts. In France, voters elected as president a Socialist candidate, Francois Hollande, who said “my enemy is finance.”
Shareholders expressed some sympathy for those who have lost jobs at banks or are being forced to adapt lifestyles to new pay levels. The biggest U.S. banks are cutting at least $30 billion of expenses, and “I shudder to think how many people that is,” said Kevin Conn, a financial-stock analyst at Boston- based Massachusetts Financial Services Co., which managed $310.8 billion in mutual-fund and institutional accounts worldwide as of Nov. 30.
Shifting Environment