It was only April, and the losses stemming from the now infamous multibillion-dollar trading loss were only at about $700 million, when JPMorgan Chase [stock JPM][/stock] CEO Jamie Dimon dismissed reports losses could go much higher as a “tempest in a teapot.”
For the past three months, he’s been gradually changing his tune.
Only a month later, when losses had climbed to more than $2 billion, did he start to publically deal with the seriousness of the problem. He did this by letting go of the company’s chief investment officer, Ina Drew, and shutting down the London office that had caused the whole mess.
Last month, as losses continued to mount, he told Congress he was “dead wrong” about the little teapot remark.
“We made a mistake. I’m absolutely responsible. The buck stops with me,” he said.
JPMorgan stock has lost 15% since the loss was originally announced back on May 10, so Dimon certainly has reason to increase the drama in his voice. Even Friday, after the company’s big gain, it was still $5 below the closing price of $40.74 on that fateful day in May.
That there was a gain at all came from even more dramatic language from Dimon.
“This has shaken our company to the core,” he said, announcing that the managers responsible have all been let go without severance pay with plans for them to give back two years of salary. He assured analysts the losses were mostly behind the company, and that it was an “isolated incident” that would not repeat itself.
The bank is being investigated by the Securities and Exchange Commission and the Federal Bureau of Investigation, and internal investigations continue. And though Dimon was completely off the mark in April, it’s unlikely they’ll be able to prove that he knew how wrong he was.
In all likelihood, he just made the mistake of being too dismissive too soon to too many people, and it put him in an awkward position — one that necessitated what is now a very interesting timeline of responses to the problem.
After all, going from $700 million to $5.8 billion in losses over three months would be a pretty awkward time for anyone.