S.E.C. Opens Investigation Into JPMorgan’s $2 Billion Loss

NYT ^ | 5/11/12 | BEN PROTESS and SUSANNE CRAIG

[Kartographer]

Regulators are investigating potential civil violations surrounding the $2 billion loss that JPMorgan Chase disclosed on Thursday, raising further questions about trading activities at the nation’s biggest bank.

The Securities and Exchange Commission recently opened a preliminary investigation into JPMorgan’s accounting practices and public disclosures about the trades, according to people briefed on the matter, who spoke on the condition of anonymity because the case is not public. Regulators learned about the activities in April, and formally opened an investigation in recent days, the people said.

[Conscience of a Conservative]

The issue isn’t that they made a bad trade and lost $2 billion. The issue is that less than a month before announcing the $2 billion loss (which, by the way, will likely end up being more than $2 billion, possibly much more), when rumors started flying around the market about the bad trade, Jamie Dimon publicly called it a “tempest in a teapot.”

The issue the SEC is going to be looking at more than anything else is whether Dimon knew (or should have known) the likely severity of the losses when he downplayed the issue.

[SCalGal]

Where were they before all of this came out?

Where have they been since Carter?