Jamie Dimon to Testify in US Congress

May 28, 2012 Updated: October 1, 2015
JPMorgan Chase CEO James Dimon
JPMorgan Chase & Co. CEO Jamie Dimon looks on while speaking at Simon Graduate School of Business at the University of Rochester's New York City Conference on May 3. Dimon will testify in front of the Senate Banking Committee on June 7. (Mario Tama/Getty Images)

NEW YORK—Weeks after a staggering $2 billion-plus trading loss, JPMorgan CEO Jamie Dimon will be hauled in front of the Senate Banking Committee next week to provide more information regarding the loss.

Sen. Tim Johnson (D-S.D.), the chairman of the committee, confirmed last Friday the testimony, which is scheduled for June 7.

“I expect Mr. Dimon to come prepared to provide the committee a better understanding of this massive trading loss so we can take the implications into account as we continue to conduct our robust oversight over the full implementation of Wall Street reform,” Johnson said in a statement.

Dimon first disclosed the $2 billion loss on a conference call on May 10, which came from a hedging trade gone sour. The bank later said that losses could double depending on the market.

The CEO has gone on the defensive regarding the loss, which he characterized as a one-off occurrence, and labeled the trade a mistake.

The timing of the loss couldn’t come at a worse time. Dimon has been one of the more vocal opponents of the Dodd-Frank financial reform legislation, particularly the so-called Volcker Rule, which prohibits deposit-taking banks from participating in proprietary trading strategies, or making bets using the firm’s money.

The Senate Banking Committee last week had already questioned officials from the Commodity Futures Trading Commission and the Securities and Exchange Commission on what they knew about the trade.

In a separate report, JPMorgan is expected to shake up its risk-policy committee in the wake of the trading loss, according to a Wall Street Journal report. According to the report, JPMorgan already had plans to make changes to the committee prior to the May 10 loss, but recent events could suggest bigger changes.

Currently, the bank’s risk committee includes James Crown, from Henry Crown & Co., as well as Honeywell CEO David Cote and American Museum of Natural History President Ellen Futter.

Crown is the only member of the committee with Wall Street experience, albeit he hasn’t actively worked in the industry in the last 25 years, Bloomberg said. Cote and Futter’s work history suggests that they do not have prior banking or extensive financial experience.

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