The following article is brought to you by Jessica Silver-Greenberg at NYTimes.Com.
A senior executive in the inner circle of JPMorgan Chase’s chief executive, Jamie Dimon, is leaving the nation’s largest bank, the latest chapter in management turnover after the bank’s multibillion-dollar trading loss.
(CHASEHOMEFIANCESUX RESPONSE: Hip! Hip! Hooray! Please Tell Me You’re Next Jamie!? This Just Made My Weekend!)
The executive, Frank Bisignano, the co-chief operating officer, is expected to leave as early as this week, according to several people with knowledge of his decision. The trading losses at the bank have swelled to more than $6.2 billion since first disclosed almost a year ago.
Mr. Bisignano will become chief executive of First Data Corporation, a payment processing firm, people with knowledge of the matter said. Matt Zames, who had shared the role of chief operating officer with Mr. Bisignano, is expected to take over all aspects of the job, according to people with knowledge of the decision, which they said, should make for a smooth transition.
A spokeswoman for JPMorgan Chase declined to comment.
With Mr. Bisignano’s departure, executives who once surrounded Mr. Dimon as he helped steer the bank through the 2008 financial crisis will be even thinner. Several other executives have already left, including Heidi Miller, James E. Staley, Bill Winters and Steve Black.
As part of a broad management reshuffling in July, Mr. Bisignano was promoted to co-chief operating officer, a role he shared with Mr. Zames. During his time at JPMorgan, Mr. Bisignano gained a reputation as a kind of Mr. Fix-It. His reputation had not been tarnished by the outsized bets made by traders in JPMorgan’s chief investment office.
He took the reins of JPMorgan’s floundering mortgage unit in 2011 just as the bank was grappling with thorny legal issues, including investors who accused the bank of selling shaky mortgage-backed securities that later imploded. To root out the problems, Mr. Bisignano revamped the mortgage unit and unveiled a policy to address cases in which JPMorgan had wrongfully foreclosed on active-duty military members, a violation of federal law. He was a skilled manager at the bank and kept a tight watch over the mortgage operations.
Mr. Bisignano will leave at a challenging time for JPMorgan, which once held special sway with federal regulators, in part because the bank largely sidestepped the financial crisis.
Now, JPMorgan is facing a criminal inquiry about whether it misled investors and regulators about the botched trades. Besides that inquiry, JPMorgan is dealing with investigations by at least eight federal agencies, including the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission and the Securities and Exchange Commission, according to the people with direct knowledge of the matter. Prosecutors are examining a range of issues, including possible breakdowns in its controls of money-laundering activities.
The bank is also working to bolster its risk and compliance controls while repairing frayed relationships with regulators in Washington. The breakdown between JPMorgan and its primary regulator was illuminated during a Senate hearing and report by the Senate’s Subcommittee on Investigations that painted a picture of a bank that sometimes took a defiant position with regulators.
To account for the trading losses, Mr. Dimon has testified before Congress and repeatedly apologized for the mistakes.
In his annual letter to shareholders this month, Mr. Dimon continued to be contrite. He vowed to continue improving risk controls, again expressing that the bank “let our regulators down.”
Mr. Dimon promised to redouble efforts to fix compliance problems by deploying resources to further fortify controls. “We are reprioritizing our major projects and initiatives,” he said.
(CHASEHOMEFINANCESUX RESPONSE: Reprioritizing? Does That Mean Less Screwing Of The American People For Personal Gain?)