The other day we examined a claim by the New York Times that Jamie Dimon, the chairman and chief executive of the serial lawbreaking bank company JPMorgan Chase, was supported in his job by "the people who matter" -- defined as "investors, analysts, board members and, yes, even regulators."
"None of them want him fired," asserted the writer, Andrew Ross Sorkin.
Now, via Bloomberg, we find this isn't true. One important bank regulator not only wanted Dimon fired but made it happen.
The regulator is the Office of the Comptroller of the Currency, which oversees national banks, including JPMorgan's bank subsidiary. It turns out that the OCC was the driving force behind Dimon's stepping down as chairman of the subsidiary back in July. He remains chairman and CEO of the parent company.
The OCC's recommendation about Dimon's role followed its investigation of the "London Whale" trading debacle, which cost the bank more than $6 billion. The Comptroller's report cited "lax governance and oversight" in the investment office that supervised the trading, along with other "oversight deficiencies."
JPMorgan dissembled about the change in Dimon's status, denying to the Wall Street Journal that it resulted from regulatory pressure and stating that it was designed "solely to create a more uniform structure among our subsidiary boards." The company didn't mention the teensy shove exerted by the OCC.
What's saddest about the OCC's action is that it's an outlier. JPMorgan is regulated by the Federal Reserve, FDIC, Commodity Futures Trading Commission, Federal Energy Regulatory Commission and Securities and Exchange Commission (and probably a few other agencies).
They have investigated various misdeeds committed on Dimon's watch, and disciplined the company, when at all, by extracting monetary penalties. These punish the shareholders, who are already victimized by fraud and chicanery at the bank, rather than the executives who are in charge. (On the other hand, the shareholders aren't clamoring for DImon's removal, so maybe they deserve to pay.)
So the OCC stands alone among the "people who matter" in pointing the finger directly at management. It's a slow start, but at least it's a start.
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