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JP Morgan Chase chief executive Jamie Dimon has opposed the 'Volcker Rule', but said it would not have prevented the bank's surprise losses. Charles Dharapak/AP

JP Morgan blames 'sloppiness and bad judgement' for surprise $2bn loss

In a surprise conference call, the bank reveals that a single trader in London – nicknamed ‘Voldemort’ – has lost billions.

THE UNITED STATES’ biggest bank has blamed “errors, sloppiness and bad judgement” after revealing that it had lost over $2 billion (€1.55 billion) in trading on complex financial investments.

JP Morgan Chase’s losses were revealed in a regulatory filing made yesterday, and discussed by the bank’s chief executive Jamie Dimon in a last-minute conference call with investors last night.

BBC News reports that the major loss could mean the bank, which became the biggest in the US after the financial crisis, is set to lose $800 million, or possibly as much as $1 billion, in the second quarter.

Dimon told investors that the management strategies taken at the bank’s chief investment office were “riskier” than previously believed, resulting in “sloppiness” and “egregious mistakes”.

The New York Times said the losses had been accrued within a matter of weeks, and that rumours of heavy losses had started circulating among traders a month ago, dealing with a trader in London – nicknamed ‘Voldemort’, after the Dark Lord in the Harry Potter books – who had begin making larger and more aggressive bets.

Though the losses will not pose any major threat to the bank’s viability – it made $19 billion in profit last year – they will give further fuel to calls for banks to be more heavily regulated in market activities like hedging.

One act passed by Congress in 2010, the ‘Dodd-Frank’ Act reforming regulatory practice on Wall Street, is currently being enacted to feature the so-called ‘Volcker Rule’ which bars banks from using customers’ money to making speculative investments which do not benefit those customers.

Dimon – who has openly opposed giving legal effect to the Volcker Rule – insisted last night that such a rule would not have prevented the newly-reported losses, however.

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9 Comments
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    Mute Peter
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    May 11th 2012, 9:58 AM

    They can get their friends at the FED to give them more monopoly money to play with secretly

    26
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    Mute Declan Mannix
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    May 11th 2012, 9:44 AM

    that minus 2 billion easily fixed, get voldemort to just tap it with a stick twice and say ‘WINGARDIAN LEVIOSA ‘ . it will rise up like magic and become plus 2 billion. sure the dogs in the streets know that.

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    Mute Stephen Downey
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    May 11th 2012, 1:54 PM

    Pay peanuts, you get monkeys! Pay exorbitant salaries with attractive bonuses, share options and pensions – you still get monkeys!

    It’s a jungle out there!

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    Mute David Widdis
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    May 11th 2012, 12:44 PM

    And that’s why they pay they have to pay such high salaries to be sure they get the best and the brightest !

    Didn’t they say the same about Lehman brothers
    or was that RTE?

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    Mute Dermot Purcell
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    May 11th 2012, 10:31 AM

    what happened here could they not shove these losses over on to the backs of tax payers somewhere in the world

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    Mute Stephen Conneely
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    May 11th 2012, 10:53 AM

    Maybe we should offer them a helping hand?

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    Mute Gemma
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    May 11th 2012, 5:15 PM

    Max Keiser has been on about this crowd for ages and the losses they are hiding. The game is up and we know the emporor has no clothes! Max has not been wrong yet to be honest. If you havent seen him go watch http://www.maxkeiser.com

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    Mute Ireland for Change
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    May 11th 2012, 5:23 PM

    That is just clearing 2bil from the fictional zeros in the system all part of the scam

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    Mute Stefan Hanrahan
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    May 11th 2012, 1:31 PM

    Who cares about JPMorgan and there loss

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