The Lookout

Sources say FBI to probe JPMorgan trading loss

The Lookout

The FBI has opened a probe into JPMorgan Chase & Co.'s $2 billion trading loss, several media sites are reporting.

The Los Angeles Times reported this from an anonymous source:

"We are aware of the matter and are looking into it," said a Justice Department official who has been briefed on the probe but was not authorized to speak publicly. "This is a preliminary look at what if anything might have taken place."

The inquiry by the FBI's financial crimes squad in New York is in a "preliminary infancy stage," the official said Tuesday, and federal law enforcement agents are pursuing the matter "because of the company and the dollar amounts involved here."

The major banking institution reported an approximately $2 billion loss because of a "flawed, complex, poorly reviewed, poorly executed and poorly monitored" derivatives trading strategy through the bank's Chief Investment Office, a London-based unit of the bank.

Meanwhile, shareholders backed embattled Chief Executive Jamie Dimon at the bank's annual shareholders meeting in Florida on Tuesday, voting against a proposal to split the CEO and chairman roles, Reuters reported.

The Securities and Exchange Commission and the Federal Reserve have also said they were looking into the bets that led to the huge loss.

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