Case | HBS Case Collection | August 2012 (Revised September 2012)

JP Morgan Chase & the CIO Losses

by Clayton Rose

Abstract

On July 13, 2012, JP Morgan Chase & Co. announced a larger than expected loss for the quarter, $4.4 billion, from positions held in the Chief Investment Office (CIO), raising the total losses to $5.9 billion. Since the substantial risks in the CIO had first been revealed on April 5, the firm and its CEO, Jamie Dimon, had been the source of intense scrutiny by regulators, legislators, the media, shareholders, and analysts. The situation represented a rare, but significant, misstep by Dimon who had successfully steered Morgan through the financial crisis and was regarded as one of the financial industry's best leaders and risk managers. The firm also revealed that it was restating its first quarter 2012 results because of what it had learned as it investigated the CIO losses.

Keywords: risk management; banking; governance; finance; Risk Management; Corporate Governance; Business Earnings; Accounting; Banking Industry; Financial Services Industry; United States;

Citation:

Rose, Clayton. "JP Morgan Chase & the CIO Losses." Harvard Business School Case 313-033, August 2012. (Revised September 2012.)