US to start probe of $2-bn JPMorgan loss

The US Department of Justice and the Federal Bureau of Investigation in New York have begun a criminal probe of JPMorgan Chase & Co’s $2-billion trading loss, a person familiar with the matter said.

The US is looking into what if any criminal wrongdoing occurred in relation to the losses the bank reported last week, said the person, who declined to be identified because the matter isn’t public. The inquiry is in its most preliminary stage, the person said.

The US Securities and Exchange Commission and the Commodity Futures Trading Commission, which regulates derivatives trading, are also examining New York-based JPMorgan’s trading activities, according to people familiar with those probes.

JPMorgan Chief Executive Officer Jamie Dimon said on May 10 that the bank made “egregious” mistakes and that the losses of about $2 billion tied to synthetic credit securities were “self-inflicted.” Joseph Evangelisti, a spokesman for the bank, didn’t immediately respond to an e-mail seeking comment.

Ellen Davis, a spokeswoman for Manhattan US Attorney Preet Bharara, declined to comment. Robert Nardoza, a spokesman for US Attorney Loretta Lynch in Brooklyn, where JPMorgan has some of its operations, didn’t return calls seeking comment. The probe was reported earlier by the Wall Street Journal.

91.5% of shareholders approve pay proposal

JPMorgan Chase & Co said its executive compensation plan won the approval of 91.5 per cent of shareholders in a non-binding annual advisory vote, up from 73 per cent last year.

JPMorgan announced the preliminary results today at the company’s annual shareholder meeting in Tampa, Florida. The board awarded $23 million in salary and bonuses to JPMorgan Chairman and Chief Executive Officer Jamie Dimon, 56, for his 2011 performance,the same amount he received for 2010.

The New York-based bank reported record net income for 2011 and its stock fell 22 per cent during the year.

JPMorgan’s compensation plan also awarded $14 million in salary and bonuses to Ina Drew, 55, who resigned yesterday. Her departure came four days after JPMorgan disclosed that the chief investment office that Drew oversaw lost $2 billion and may lose more. The company will consider reclaiming some of her stock awards, according to two senior executives.