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Jamie Dimon
Jamie Dimon became Chief Executive Officer of JPMorgan Chase & Co. on January 1, 2006. In addition, Mr. Dimon is President of the company, a title he assumed upon the company's merger with Bank One Corporation on July 1, 2004.As Chairman and CEO of Bank One for four years, Mr. Dimon engineered a dramatic turnaround at the company taking the bank from a half-billion-dollar loss in 2000 to record earnings of $3.5 billion in 2003. Mr. Dimon strengthened the management team by promoting talented managers and by recruiting experienced leaders. The company also fortified its balance sheet, improved the service it provides customers, upgraded to a single technology platform and moved to a single brand.

Mr. Dimon began his professional career at American Express Company, serving as Assistant to the President from 1982 until 1985. He then became a key member of the team that launched and defined the strategy for Commercial Credit Company in
October 1986, when the consumer lending company was spun off from Control Data Corporation. He served as Chief Financial Officer and an Executive Vice President, and then President. A completely restructured Commercial Credit made numerous
acquisitions and divestitures, substantially improving its profitability. Most significantly, in 1987, it acquired and changed its name to Primerica Corporation, which in 1993 acquired The Travelers Corporation and was renamed Travelers Group.

At Travelers, Mr. Dimon was President and Chief Operating Officer for seven years. He was named Chairman and Chief Executive Officer of its Smith Barney Inc. subsidiary in January 1996, having previously been the firm's Chief Operating and Chief Administrative Officer. In November 1997, with the merger of Smith Barney and Salomon Brothers, he became Co- Chairman and Co-CEO of the combined firm. In 1998, he was named President of Citigroup Inc., the global financial services
company formed by the combination of Travelers Group and Citicorp in 1998. In addition, he served as Chairman and Co-Chief Executive Officer of Salomon Smith Barney Holdings Inc., the investment banking and securities brokerage subsidiary.

A summa cum laude graduate of Tufts University, Mr. Dimon holds an MBA degree from the Harvard University Graduate School of Business, where he was a Baker Scholar. He serves on the Board of Directors of a number of non-profit institutions,
including University of Chicago, Harvard Business School and the United Negro College Fund.

Mr. Dimon and his wife, Judy, have three daughters.

https://jpmorganchaseco.gcs-web.com/static-files/4ce12dc4-0d4c-4639-b3a1-95e01417d4fb


Rough patch for J.P. Morgans Jamie Dimon

Published: May 11, 2012 at 4:18 p.m. ET

By MarketWatch

Slide show highlights career highlights of Wall Street lion

Jamie Dimon joined American Express AXP directly after completing business school at Harvard, reportedly spurning offers from Goldman Sachs, where hed interned during his graduate studies; Morgan Stanley; and Lehman Brothers. He is widely characterized as having become the protege of Wall Street legend Sanford Weill during his time at American Express.
Reuters .

Jamie Dimon, then 41, at a September 1997 press conference during which Travelers Group of which Dimon served as president and chief operating officer for seven years under mentor Sandy Weill announced its plans to purchase Salomon Brothers. A deal later that year brought Travelers and Citicorp together as Citigroup C.
Reuters .

Dimon was at Weills right hand at the formation of the financial-services behemoth Citigroup in 1998, where Dimon was tapped as president. He was also chairman and CEO of the Salomon Smith Barney unit. A much-discussed power struggle between Weill and Dimon reportedly paved the way for the latters departure from the company. Dimon resurfaced as chairman and CEO at Chicago-based Bank One.
Reuters .

J.P. Morgan CEO William Harrison (left) joins Dimon, Bank Ones chief executive since 2000, at the start of a January 2004 meeting in New York convened to discuss the merger of the two companies. That deal, announced Jan. 14 of that year, was one of the largest financial mergers in U.S. history.
Reuters .

Jamie Dimon poses for a portrait in his office in New York on Dec. 22, 2010.
Reuters .

Jamie Dimon and his wife, Judith, arrive at the White House for a state dinner hosted by President Obama and first lady Michelle Obama for President Hu Jintao of China in January 2011.
Reuters .

President Obama shakes hands with Jamie Dimon during a March 2009 meeting of business leaders at a hotel in Washington. A Democratic campaign donor, Dimon was rumored to be have been under consideration for a Cabinet post after Obamas election in November 2008.
Reuters .

Jamie Dimon talks with Goldman Sachs CEO Lloyd Blankfein before testifying before the Financial Crisis Inquiry Commission on Jan. 13, 2010.
Reuters .

Jamie Dimon is a member of the Federal Reserve of New Yorks board of directors.
Federal Reserve Bank of New York .

Dimon joins fellow top executives of TARP-recipient financial institutions in testifying before the House Financial Services Committee in February 2009. From left: Goldmans Blankfein, Dimon, Bank of New York's Robert Kelly, Bank of America's Ken Lewis, State Street's Ronald Logue, Morgan Stanley's John Mack and Citi's Vikram Pandit.
Reuters .

The 2009 biography Last Man Standing: The Ascent of Jamie Dimon and J.P. Morgan Chase depicts Dimon as one reason for optimism that a post-crisis Wall Street was ready for reform, according to Paul M. Barretts review in the New York Times.
Simon & Schuster
https://www.marketwatch.com/story/rough-patch-for-jp-morgans-jamie-dimon-2012-05-11
 

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JPMorgan Chase
Harvard Business School
Harvard Business School

About
Jamie Dimon became Chairman of the Board on December 31, 2006, and has been Chief Executive Officer and President since December 31, 2005. He had been President and Chief Operating Officer since JPMorgan Chase's merger with Bank One Corporation in July 2004. At Bank One he had been Chairman and Chief Executive Officer since March 2000. Prior to joining Bank One, Mr. Dimon had extensive experience at Citigroup Inc., the Travelers Group, Commercial Credit Company and American Express Company.

Mr. Dimon graduated from Tufts University in 1978 and received an MBA from Harvard Business School in 1982. He is a director of The College Fund/UNCF and serves on the Board of Directors of The Federal Reserve Bank of New York, The National Center on Addiction and Substance Abuse, Harvard Business School and Catalyst. He is also on the Board of Trustees of New York University School of Medicine. Mr. Dimon does not serve on the board of any publicly traded company other than JPMorgan Chase.

Articles by Jamie
An Update on JPMorgan Chases Response to COVID-19
An Update on JPMorgan Chases Response to COVID-19
By Jamie Dimon

May 19, 2020

An opportunity to do better
An opportunity to do better
By Jamie Dimon

December 13, 2019

Investing in our people, business & communities for long-term growth
Investing in our people, business & communities for long-term growth
By Jamie Dimon

January 23, 2018

Activity
We manage JPMorgan Chase & Co. consistently with principles that have stood the test of time
We manage JPMorgan Chase & Co. consistently with principles that have stood the test of time. Throughout our history, the firm has built its...
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Four essential ways to ensure young people of all backgrounds can be put on a path to career
Four essential ways to ensure young people of all backgrounds can be put on a path to career success.
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Capitalism must be modified to do a better job of creating a healthier society, one that is more
Capitalism must be modified to do a better job of creating a healthier society, one that is more inclusive and creates more opportunity for more...
Shared by Jamie Dimon

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JPMorgan Chase
JPMorgan Chase
16 years 2 months

Chairman of the Board
Dec 2006 Present13 years 9 months

Chief Executive Officer and President
Dec 2005 Present14 years 9 months

Greater New York City Area

President and Chief Operating Officer
Jul 2004 Dec 20051 year 6 months

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Bank One
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Bank One
Mar 2000 Jul 20044 years 5 months

Education
Harvard Business SchoolHarvard Business School
Harvard Business School
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Tufts UniversityTufts University
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Citigroup's Jamie Dimon to Leave Firm Amid Shake-Up in Banking Operations

By Paul Beckett and Anita RaghavanStaff Reporters of The Wall Street Journal

BUSINESS PEOPLE; President of Primerica Surprised by Promotion

By Kurt Eichenwald
Sept. 26, 1991

Credit...The New York Times Archives
See the article in its original context from
September 26, 1991, Section D, Page 4Buy Reprints
This is a digitized version of an article from The Timess print archive, before the start of online publication in 1996. To preserve these articles as they originally appeared, The Times does not alter, edit or update them.
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When he graduated from Harvard Business School in 1982, James Dimon faced the same question as many of his classmates: Where should he work as an investment banker?

Mr. Dimon asked the question of an old family friend, Sanford I. Weill, who had just merged the firm now known as Shearson Lehman Brothers with the American Express Company.

Mr. Weill came up with a different possibility: Forgo the heavy compensation of investment banking and instead work as his personal assistant. Mr. Dimon jumped at the chance.

That decision nine years ago has paid off in spades. Yesterday Mr. Dimon was named president of the Primerica Corporation, the financial service conglomerate where Mr. Weill now serves as chairman and chief executive.

The title of president has been held by Mr. Weill, while Mr. Dimon has been executive vice president and chief financial officer, and is expected to keep the second title.

The promotion is an astonishing move, making Mr. Dimon, at 35, perhaps the youngest president of a major financial services firm and one of the most powerful members of his generation on Wall Street.

"I am very surprised," Mr. Dimon said yesterday in an interview. "When Sandy told me, I almost fell off my chair."

The move was standard for Mr. Weill, who has often given the executives working for him a great deal of power, with the result that they end up in high-level posts.

Mr. Weill said yesterday that Mr. Dimon had won the post because of his prodigious work. "It seemed appropriate to promote Jamie, who has done a fantastic job in understanding and relating to every part of our business, and give him the oppportunity to grow and do a lot more," Mr. Weill said. "I think it is applauded by everybody in the company."

The promotion came as part of a broader management restructuring. Also yesterday, Primerica named to the new positions of vice chairmen Robert I. Lipp, the chairman of the company's consumer service division, and Frank G. Zarb, the chairman and chief executive of Primerica's Smith Barney Inc.

While working with Mr. Weill at American Express, Mr. Dimon held the titles of vice president and assistant to the president.

When Mr. Weill left American Express, Mr. Dimon joined him, moving to the Commercial Credit Corporation in 1986 when Mr. Weill took it over.

The purchase of Primerica by Commercial Credit resulted in Mr. Dimon becoming chief financial officer, where he became the central force behind the financial restructuring of the company, which has resulted in several upgradings of its debt ratings.


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https://www.nytimes.com/1991/09/26/business/business-people-president-of-primerica-surprised-by-promotion.html 

Updated Nov. 2, 1998 12:01 am ET


NEW YORK -- Jamie Dimon, who was viewed by many as a leading candidate to someday be chairman of Citigroup Inc., said he will leave the financial-services giant amid a radical shake-up of the firm's commercial- and investment-banking businesses.

Soon after the April announcement that Travelers Group Inc. and Citicorp intended to merge to form Citigroup, Mr. Dimon was named Citigroup president. He was also appointed co-chief executive officer of Salomon Smith Barney, Travelers's brokerage unit. Citigroup was officially created last month when the merger closed.

The departure of Mr. Dimon, 42 years old, comes after years of tension between him and Sanford I. Weill, former chairman of Travelers Group and now co-chairman of Citigroup, even though Mr. Dimon was viewed as one of Mr. Weill's closest aides. It also raises questions about how far Citigroup's integration has advanced since planning began soon after the megamerger was unveiled.

New Assignments

No successor as president was named. Mr. Dimon's co-chief executive at Salomon Smith Barney, Deryck Maughan, was reassigned to a new role as vice chairman of Citigroup to advise on implementing strategy.

The task of running Citigroup's global-investment and corporate bank will now be shared by Victor Menezes, former chief financial officer at Citicorp, and Michael Carpenter, former chairman of Travelers Life & Annuity. The global-investment and corporate bank will combine both Citibank's corporate-banking operations and Salomon Smith Barney's brokerage operations.
https://www.wsj.com/articles/SB909961163838782500

$58B bank deal set

J.P. Morgan agrees to buy Bank One in a deal that would combine two of the nation's biggest banks.
January 15, 2004: 11:07 AM EST

 NEW YORK (CNN/Money) - J.P. Morgan Chase & Co. has agreed to buy Bank One Corp. for about $58 billion in a merger that will combine two of the biggest banks in the United States, the companies announced Wednesday.

The merged entity would rank as the nation's No. 2 bank behind Citigroup, with assets of $1.1 trillion and 2,300 branches in seventeen states.

On its own, J.P. Morgan would have fallen to No. 3 after Bank of America Corp.'s $47 billion deal to buy FleetBoston Financial Corp. is completed. Bank One currently ranks No. 6.

The deal for Chicago-based Bank One will extend J.P. Morgan's reach through the Midwest and the Southwest, and lessen its dependence on investment banking and trading, analysts said.

J.P. Morgan also gets a strong retail and credit card presence with Bank One, the world's largest Visa card issuer.

Analysts were enthusiastic. "There is a real logic to [the Morgan-Bank One merger]," Bert Ely, a banking consultant at Ely & Co. in Alexandria, Va., told Reuters. "The only thing I would wonder about is might a competing bid come in."

"Lovely deal," Michael Stead told Reuters. Stead, who runs the $550 million Wells Fargo SIFE Specialized Financial Services fund, owns shares of both banks. "They would command a wider geography, and they could cross-sell products more easily. A combination would be better than the sum of the parts."

J.P. Morgan Chase, whose roots date to 1799, was formed three years ago from the merger of Chase Manhattan and J.P. Morgan.

The merger of J.P. Morgan and Bank One, expected to close in mid-2004, would be the third largest in U.S. financial services. In 1998, Travelers Group bought Citicorp for $70.2 billion to create Citigroup, and NationsBank bought BankAmerica for $59.2 billion to create Bank of America Corp.

The terms
Under the deal announced Wednesday, New York-based Morgan said it would exchange 1.32 shares of its stock for each Bank One share.
At Wednesday's closing prices, that would equal $51.77 a share, or about $58 billion based on Bank One's roughly 1.12 billion shares outstanding.

J.P. Morgan said Chairman and CEO William Harrison, 60, will take those roles at the merged company. Bank One chief Jamie Dimon, 47, will become CEO of the company in 2006, the companies said.

That represents a coup for Dimon, who moved to the helm of Bank One in the spring of 2000 after leaving Citigroup, where he had been considered a leading contender for the top job.

Cost cutting is part of the logic of the deal. Harrison said "we will have about 10,000 job eliminations," about 7 percent of the banks' U.S. work force. He said the banks haven't decided where cuts will be, but "the number will hopefully not be near 10,000 because we'll have attrition."

J.P. Morgan said it expects $3 billion of pretax merger costs, and $2.2 billion of pretax savings over three years. It said it expects the merger to boost profit in 2005.

Bank One (ONE: Research, Estimates) stock jumped 10 percent while J.P. Morgan (JPM: Research, Estimates) shares slipped 4 percent in after-hours trading on Instinet.

J.P. Morgan had assets of about $793 billion as of Sept. 30 while Bank One's assets totaled $290 billion.
https://money.cnn.com/2004/01/14/news/deals/jpmorgan_bankone/

 
Sandy Weill completes circle in Baltimore

By Laura Smitherman
The Baltimore Sun
December 10, 2006

In some ways, the iconic career of Sanford I. "Sandy" Weill, who built Citigroup Inc. into the world's largest financial services company, began and ended in Baltimore.

Although Weill officially started as a runner at Bear Stearns and sold a securities firm he helped create to American Express, he would really cut his teeth as an empire builder when he took over consumer lender Commercial Credit Corp. in Baltimore in 1986. On that foundation, through a series of mergers, Citigroup was born.


Two decades later, Weill came full circle when Citigroup swapped its asset management unit for the brokerage business of Baltimore-based Legg Mason Inc. Weill had given up the CEO post but retained the title of chairman and had a hand in arranging the deal that would be his last.

And so it was that Weill breezed through Baltimore recently to speak at a "private" luncheon for 200 Citigroup employees and clients. It marked another stop on his book tour, a road show that has taken him to a dozen cities from Boston to San Francisco, to plug his memoir, The Real Deal: My Life in Business and Philanthropy.

The 500-page book, written with the help of former Merrill Lynch analyst Judah S. Kraushaar, takes readers through a detailed accounting of his life in global finance and charity. It also includes a section by his wife, Joan, whom he affectionately calls "Joanie." Theirs was one merger he didn't propose - she popped the question to him.

Weill shares anecdotes about his successes, his famous temper and relationship gone bad with protege James "Jamie" Dimon, now head of JPMorgan Chase & Co., and his run-ins with regulators as Citigroup became ensnared in the Enron and WorldCom scandals.

Among the yarns is a nod to former Baltimore Mayor William Donald Schaefer, though not by name. When Weill arrived at "sleepy" Commercial Credit, he says the bus schedule to the suburbs effectively made quitting time 4:30 p.m. So he sought the help of Schaefer, and with a nudge from the politico, he says the times were changed.

That kind of service didn't convince Weill to stay in Baltimore, however, and he says Schaefer didn't give him a "guilty conscience" when the decision was made to move the headquarters to New York. Weill is quick to point out that the company's Baltimore subsidiary, CitiFinancial, has far bigger operations than predecessor Commercial Credit ever did. The subsidiary employs about 1,000 people in the city.



The Sun sat down with Weill, who retired this year at 73, at the Harbor Court Hotel. Below are excerpts from that talk:

What was your role in the Legg Mason-Citigroup deal?

I've known [Raymond A.] Chip Mason for many decades. And when Citigroup decided that it might make sense for them to exit the asset management business, I thought that Legg Mason could possibly be a very good potential candidate. I spoke to Chip and got the conversation started between him and [then Citigroup President] Bob Willumstad.

You are regarded as the father of the "financial supermarket," yet that deal could be seen as a dismantling of the concept.


I don't believe in supermarkets. I hate that expression, and the reason is that supermarkets have very low margins. It's a company that would make maybe 1 percent on its sales, and the financial services business is one with pretty high margins. ... We haven't given up anything. It's like a store that would sell branded merchandise rather than a store that would sell private label merchandise.

What about Baltimore ... ?

You mean Bal'more?

Yes, thank you for correcting me. How did you end up here?

There was an article in Fortune, and the headline was, "Sanford Weill: Experienced Manager, Good References." A couple of people that worked in the financial group at Commercial Credit saw this article and called me up. I said that I had looked at their company a couple of years before and didn't think it was anything we would be interested in, but they said the company had changed and that I could be the perfect person for it. I agreed to meet with them. And that's how it started.

Did you ever consider moving to Baltimore?

I lived here in this hotel for a little over a year. When I came down here, I really felt that this was where the company was headquartered. My wife and I looked at condos and were thinking about getting a place maybe on the Eastern Shore, and we had every intention to come down here. But it turned out that a lot of the people we thought we would need to grow the business were not part of the company, and therefore we were going to have to attract a lot of new people that didn't live in Baltimore.

Maybe we, could we switch gears to talk about ...

The book?

We could do that ...

You are talking to a best-selling author.

Why don't you start with what inspired you to do the book?

I felt I had a lot of things to say about management, about family and partnership, about philanthropy. And I felt that none of those things would be important or believable unless we told the story of what happened over a 50-year period in a very transparent way and in a lot of cases a pretty self-critical way. So I really opened myself up.

Who is your audience?

The book is written in pretty simple words - you know I don't speak in multisyllable words. And I think we made it so that somebody doesn't have to be in the financial business to understand it and can see the excitement of it, the intrigue and the pitfalls, the politics, and the relationships.

In your book, you list your top 10 lessons for success. Barring The Sun printing all 10, could you pick three?

No. 1 is partnership and trying to encourage an environment where people work together and the enemy is somebody who works for another company and not the person in the next office that's competing for the job.

No. 2 is looking at change as an opportunity rather than as something to be feared. And I would say No. 3 is that it's OK to make a mistake because if you create an environment where people are so fearful of making mistakes, you're going to have a company that does nothing because the perfect person hasn't been born.

You say in the book Citigroup was a scapegoat after Enron and other scandals. What did you learn from that time?

We attracted attention with the leaking of e-mails and the fact that we were this big company, and our analyst ... didn't come across very well in some of those hearings. ... We always said we didn't do anything illegal. But people lost a lot of money in Enron and WorldCom, and it was important if our company was going to continue to be a leader that we should lead in the reform and governance movements and not be standing there and defending everything we did, saying that everyone did it.


Some industry observers have said that Citigroup simply got too big to oversee.

I don't believe that. In any company that is global, there is somebody someplace that's trying to beat the system or take shortcuts no matter how much you say that's not what you want to do, that's not what the company is going to reward.


Let me ask you about issues the market is still debating post-Enron. What about the hyper-focus on quarterly earnings?

I strongly believe there is no long term without a good short term. People that don't focus on the short term and say they're just long-term strategic thinkers, you don't know whether that's true or not until they underperform for a long time and maybe end up going out of business.

Executive compensation remains a lightning rod, and you faced criticism for your pay. Regardless of whether a CEO delivers for shareholders, is there a level at which compensation is simply too much?

If we are a country that believes in free enterprise, then the level is going to be something determined by the free market. In our company, we turned out to be very lucky in that our people were paid a good percentage of their compensation, or what was reported to be compensation by the press, in stock. ... The stock kept on going up, so we were all forced to become rich.

[Note: Weill ranks No. 242 on Forbes' list of the 400 richest Americans with a net worth of $1.5 billion. Citigroup's net worth by market capitalization is $250 billion.]

laura.smitherman@baltsun.com

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Mar. 21, 2008
The Heist
By Duff McDonald
Illustration by Sean McCabePhoto: Najlah Feanny/Corbis

The Monday after a long working weekend, Jamie Dimon looked a little tired. His collar was unbuttoned, his tie loosened, and he was slouching slightly in his office chair. The week before, he had turned 52 years olda bunch of balloons was still tethered in the corner of his officeand his hair was whiter than most recent photos show. But he was far from worn out. Dimon, the chairman and CEO of JPMorgan Chase, had just won the biggest game of his life.

Sunday, March 16, 2008, will go down in history one way or another. Depending on how things develop from here, it might be considered the day Dimon helped save Wall Street. While he certainly wouldnt put it that way, his shocking triumph that eveningan agreement, brokered by Ben Bernanke, the Federal Reserve chairman, to take over Bear Stearns, a Wall Street institution, for the pretty-much-laughable price of $2 a sharemay have in the process helped avert a financial panic the likes of which hasnt been seen since 1929. Or maybe Dimon will have to settle for the trophy for best deal ever, spending just $260.5 million for a company whose last reported net worth was $11.7 billion and whose lavish Madison Avenue headquarters alone is estimated to be worth more than $1 billion.

We had one and a half days to do this deal, which includes uncertainties we dont even know about, said Dimon, in a voice that still contains traces of his Queens upbringing. So it wasnt a typical valuation. Two dollars a share is a reflection of the extra risk JPMorgan Chase was taking on in the middle of the night to do something that otherwise might not have gotten done. We had to build in a margin for error, where if we were wrong, we werent risking the whole company.

I asked if there were moments during the weekend when the deal was nearly derailed. Absolutely, he replied. It had its ups and downs, but there was a general feeling that this would be better for everybody.

It may well be. It was certainly better for Dimon, from whom much had been expected. In many respects, this deal feels like the fulfillment of a prophecy.

Dimons creation myth is familiar to everyone on Wall Street. He was 26 years old, just out of Harvard Business School, when he signed on with the banking titan Sandy Weill at American Express. The Amex experience was Weills one big blunder; he clashed with the blue-blood culture and was ousted. Virtually by themselves, he and Dimon started over from the bottom, commandeering a third-tier Baltimore lending outfit called Commercial Credit. From there, like banking marauders, they pulled off an audacious string of acquisitions that culminated in the takeover of Citicorp. For a decade and a half, side by side, they built an empire, the worlds first financial supermarket.

But all was not right in the kingdom. Twenty-three years younger than Weill, Dimon was the natural heir to the throne, but as the final pieces of Citigroup came together, the partnership disintegrated. Dimon was cast out, left to wander in the wilderness. Eventually, he would return to slay the father figure (metaphorically speaking) and reclaim the role once ordained to him, as the undisputed king of the land.

Contrast: As you ride up the escalator to the second floor of JPMorgan Chases headquarters at 270 Park Avenue, you can actually see the backside of the Bear Stearns building, on Vanderbilt Avenue, which as of last Monday afternoon was full of a bunch of shell-shocked bankers still trying to process what had happened to them. Many were staring out their windows, almost, it seemed, toward JPMorgan itself, as if searching for signs of their fate.

Dimon is no stranger to takeovers, hostile and otherwise, or the jagged ups and downs of life on Wall Street. His father, a second-generation Greek-American, was a broker who worked for Weill and did well enough to move the family from Queens to Park Avenue when Dimon was in junior high. There were three Dimon boys: Jamie; his fraternal twin, Ted; and Peter. Jamie studied economics and biology at Tufts, and after Harvard Business School his father arranged for an interview with Weill.

Weill and Dimon became like father and son, a complementary team, emotional and combative at times but deeply loyal to one another. Weill was the deal-maker; Dimon was the numbers guy who could make the firms fit. The process was simple: Weill borrowed huge amounts of money to acquire companies, then they went into the shop and started cutting costs like mad to pay down the debt. Inevitably, that meant job losses and acrimony. The work required resolve and discipline but also brains, because you couldnt hurt the business in the process of all that cutting. You needed every last penny of the revenues.



Sandy Weill, left, and Jamie Dimon, then with American Express, at a conference in California in 1983.Photo: Roger Ressmeyer/Corbis

Dimon was extremely well suited to his role, and he and Weill went about assembling a financial conglomerate that investors found irresistible. There would be cross-sellingyour retail bank offering you a credit card, an investment banker facilitating a commercial loan, a stockbroker hooking you up with a mortgageand customers who once did just one type of transaction with the firm would suddenly be providing multiple streams of revenue.

Building this giant brought Weill and Dimon together, but as they neared their goal, Dimons pent-up resentments from playing second fiddle to Weill for all those years were unleashed, and his temper started to get the better of him. The tail end of Dimons tenure at Citigroup was marked by what many people saw as a level of hostility between Dimon and Weill that would not have been tolerated by any other CEO. Jamie would say things to Sandy that would leave your mouth open, says one executive who worked closely with the two men. Along the way, Dimon lost more allies than just Weill. Former Citigroup chairman and CEO John Reed (who was himself ousted by Weill) went from being a Dimon fan to a Dimon foe in mere weeks. Reed originally thought the light shone out of Jamies rear end, says the executive. He was going to be the guy to take over from Sandy and John when the two of them walked into the sunset eighteen months later. And then before you knew it, he was saying Dimon had to go.

In his early years, Dimon was praised for his intellect, his ability to focus on the details of the deals his boss, Weill, conceived of in broad strokes. With success, however, Dimon became harder to manage, certainly harder to control. Jamie was testosteronehe was loud, says someone who worked closely with him. You dont have to be like that. Ideas can carry the day.

Others saw Dimon as a victim of Weills egomania. I can still hear Jamie saying, But Sandy! with his arm up in a meeting. Without any fear. For the right reasons, says Marge Magner, the former head of Citigroups global consumer group. Whether ones interpretation favored Dimon or Weill, there was no doubt that the two were behaving like a dysfunctional family. It was awful to watch.

The final blow came during the last merger, the one that joined Travelers and Citicorp. Dimon reportedly wanted to be both president of the combined company and the chief of the corporate investment bank. Weill and Reed thought he needed to share the investment-banking job with two others, Deryck Maughan and Victor Menezes. Sandy had asked the three of them to come up with a plan to run the bank together, says one executive who was in on the discussions. So theres the meeting at 388 Greenwich when Sandy asks for their plan. Jamie said they couldnt do it unless only one of them was put in charge. And then he pretty much refused to speak. It was mutiny. Disobedience. If someone had done that to Jack Welch, he would have ripped their heart right out of their chest.

Dimon was fired in November 1998. Whatever his emotional state, his reputation emerged more or less unscathed. In fact, he was regarded as something of a martyr. There would be a CEO job for him; it was just a question of when the right one would open up. Dimon did not leap at opportunities. He turned down a job at Amazon. Sixteen months went by until Bank One, in Chicago, named him CEO. He moved his family (he and his wife, Judith, whom he met at Harvard, and their three daughters) into a 26-room mansion and took up his customary role as a cost-cutting zealot. A 2002 story in Money magazine reported that he was incensed by the number of newspaper subscriptions paid for by the company, telling one executive, Youre a businessman. Pay for your own Wall Street Journal.

Dimon did well at Bank One. One of his virtues as an executive is that hes blunt and truthfulto bosses, peers, and subordinates alike. He doesnt tend to mince words or spare peoples feelings. As a younger man, when he was forced to share power, this could turn easily into anger and nastiness. But as his own boss, he used it more effectively. In four years at Bank One, he doubled the value of the company and made it a very attractive acquisition target. In 2004, he persuaded William Harrison, then CEO of JPMorgan Chase, to purchase Bank One for $58 billion, a stupendous deal for Dimons shareholders. Dimon, it is said, offered to accept $7 billion less in the deal if he were named CEO immediately, but Harrison reportedly paid the extra to extend his own tenure. Dimon ascended to the CEO job in 2006, when Harrison moved into the chairman role. A year later, Dimon took that title, too. He was back.



Dimon crossing the street from JPMorgan to Bear Stearns last week to meet with employees.Photo: Patrick Andrade/The New York Times/Redux

And thats where the Jamie Dimon story gets quite boring, at least for a while. He returned to New York at a time when risk aversion had fallen out of favor on Wall Street. Major financial institutions, in hot pursuit of higher returns, were riding a wave of financial engineering. Dimon took a more cautious approach, focusing on the regular spadework of banking, which included renovating old branches and opening a slew of new ones. Citibank, which once dominated the Manhattan streetscape, now has just half as many branches as Chase. Dimon kept up the pressure on cost-cutting by doing things like slashing the number of software applications used by the bank.

Meanwhile, Dimon avoided easy-money gimmicks like so-called structured investment vehicles, or SIVs, one of the black holes of the current credit crisis. SIVs are deceptively simple in concept: A fund is set up that borrows using short-term securities at low interest rates, and then uses that money to buy longer-term securities with higher interest rates. For a while, Wall Street was in love with SIVs, because profits could be manufactured without putting any of the companys capital at risk. All you needed was easy access to short-term credit.

Then, last summer, the credit markets seized up, and the banks had no way to fund their obligations without dipping into their own capital. Citi had to take $58 billion of SIVs onto its balance sheet, crippling the company.

JPMorgan lost nothing in the SIV debacle. After conferring with Bill Winters and Steve Black, JPMorgan Chases co-heads of investment banking, in 2005, Dimon agreed to sell the single SIV the bank had on its books. Why? Because no matter what kind of equity we might have had to commit toward it, we still considered it an unacceptable return, Winters told me in late February.

Here another of Dimons most referenced character traitshis tendency toward micromanagementcame into play. Did deposed Citigroup chairman Chuck Prince (who got the job that would have been Dimons) have conversations with his bankers about whether Citigroup was overexposed to SIVs? If he did, he obviously made the wrong call.

Dimon also steered the bank mostly clear of CDOs, or collateralized debt obligations, another fancy bit of financial gimcrackery that purported to turn risky investments into safe ones, as if by magic. CDOs were one of Merrill Lynchs great profit centersin 2007, the firm underwrote $31 billion worth of them, compared with just $4 billion for JPMorgan, and then made the fateful decision to hold on to some of the highest-yielding (and riskiest) portions thereof. You can think of these Wall Street firms as drug dealers who forgot the cardinal rule of the trade: Dont start taking the junk yourself.

While these faddish schemes came and went, Dimons obsession with what he refers to as a fortress balance sheet did not let him follow his reckless competitors. This took conviction. One of the toughest jobs as CEO is to look at all the stupid things other people are doing and to not do thembecause maybe youre the stupid one, says Bob Willumstad, the former president and COO of Citigroup. Under Dimon, JPMorgan was a plodder, methodically increasing its profits, adding to credit reserves, and expanding market share in a number of different businesses. But as recently as the middle of last year, Dimon had sort of been forgotten. Many analysts lost interest in JPMorgan. Word got around that although he was a skilled cost-cutter, Dimon lacked the imagination to grow the business from within, and that he would soon have no choice but to start hungrily acquiring companies like he had done with Weill. Wall Street always needs a story, and Dimon didnt have one that people wanted to hear.

Then came the credit crunch, a consequence, most economists agree, of dangerously lax lending standards across the board. JPMorgan took its blowsgiven the climate, no bank was immune. The companys mortgage-related, structured-credit, and leveraged-lending write-downs totaled $2.9 billion from the summer through late February, which sounds like a lot until you look at the competition: $22 billion for Merrill Lynch, $20.4 billion for Citigroup, $18.7 billion at UBS, and $10.1 billion at Morgan Stanley.

And along with everyone else, JPMorgan is not in the clear yet. At a shareholder meeting I attended in February, chief financial officer Mike Cavanagh warned that the company already foresaw an additional $450 million in home-equity losses in 2008, a number that will surely grow by the time JPMorgan reports its first-quarter results. Much deeper losses are likely, and there is concern about its portfolio of leveraged loansthose made to finance private-equity deals over the past five years. As of the end of January, JPMorgan was sitting on $26.4 billion in loans that it wouldve liked to pass into the secondary market, if only that market still existed.



But heres the most important thing. Despite its problems, the bank remains on solid financial footing. While many of his peers have gone hat in hand to so-called sovereign funds in places like Dubai and China, Dimon hasnt needed to raise a dime. Not having to raise capital from foreign investors says a lot about them at this particular juncture, says Richard Bove, an analyst at Punk, Ziegel & Company. More to the point: In contrast to the chatter about Citigroup, no one is talking about breaking up JPMorgan Chase. While the cross-selling synergies have proved more elusive than originally anticipated, one clear benefit of a financial conglomerate is the sheer size of its balance sheetJP Morgan has $1.56 trillion in assets, the kind of heft that allows it to absorb, say, an imploding investment bank with only a couple of days notice.

When Bernanke was looking for a financial company with the wherewithal to take over Bear Stearns, there really wasnt much of a choice. If not us, I dont know who else, Dimon stated matter-of-factly.

While Bear Stearns was, until recently, the fifth-largest pure investment bank, it was relatively small fry among the giants of the financial sector, as well as something of a self-styled outsider outfit. Bear didnt aspire to the august reputations of Morgan Stanley or Goldman Sachs. They were, by and large, traders, and they suffered from the same credit-market problems that everybody else did. The difference was the fear that began to spread on the Street that the firm was undercapitalized, a situation in which perceptions quickly solidify into reality. Major clients began to pull their accounts, threatening a collapse of the firm.

The rescue mission began on Friday, March 14, when the Federal Reserve and JPMorgan agreed to provide emergency funding to Bear. Dimon had one very good reason to get involvedJPMorgan stood to lose millions itself if Bear went belly-up. But the Feds announcement failed to stop Bears stock from plummeting as more business partners ran for the exits. Bankruptcy loomed as a frighteningly real possibility. A more intensive bailout appeared necessary, and JPMorgan started quizzing Bear executives and studying their books to assess what they had. Given the state of the credit market, it was hard to place a value on many of the securities. On such a tight time frame, JPMorgan could only guess. The numbers batted around Saturday night were reportedly considerably greater than the $2-a-share figure, but no agreement was at hand, and when JPMorgan executives woke up Sunday, they were determined to go lower. The Fed, too, reportedly pushed for a lower price, to ensure that Bear shareholders, not the government nor JPMorgans shareholders, bore the brunt of the losses. That was the Feds way of averting the moral hazard of bailing out reckless bankers. Dimons inner circleCFO Mike Cavanagh, investment-banking co-heads Bill Winters and Steve Black, and general counsel Stephen Cutlerput the screws to Bear Stearns negotiating team, which reportedly included chairman James Cayne. It was clearly not the easiest transaction, says Dimon. And until the boards voted, there was no deal at all.

In the end, $2 a share amounted to a token payment. So if thats the level they were operating at, I asked Dimon, why not $1 a share? There were a lot of factors involved, he said cryptically.

The attractions for Dimon were obvious. The Fed has guaranteed some $30 billion of Bears less-liquid assets, leaving JPMorgan free to feast on the attractive ones, such as the firms prime-brokerage desk (which provides trading and other services to hedge funds), a business that JPMorgan barely competes in. Bank of America is reportedly shopping its own prime-brokerage business for $1 billion. Dimon got Bear Stearnsthe third largest in the industryfor less than a quarter of that, and thats if you ignore the rest of the business entirely. I ask him what else he likes about the acquisition. Their securities-clearing operations are excellent, he said, and went on to mention Bears equities and commodities businesses. As if thats not enough of a haul, Dimon added, They also have a great building.

The deal is not yet settled. Bear Stearns employees and shareholders have mutinied against it. Last Wednesday, Dimon and his team tried to present a compassionate face at a meeting with more than 400 outraged Bear Stearns executives. I dont think Bear did anything to deserve this, he said. Our hearts go out to you. The crowd refused to be mollified by his remarks. Many in the room had surely lost the bulk of their life savings, but the irony is hard to ignore: Investment bankers, whose actions regularly force drastic cost-cutting and job loss on companies across the world, were reeling from a taste of their own medicine. Youre acting like its our fault, and its not, Dimon argued when one forlorn banker suggested, ridiculously, that JPMorgan should compensate Bear Stearns employees for their losses.

The stock market, for now, is betting that JPMorgan is a winner, and the stock has been rewarded with a 25 percent run-up, boosting Dimons own stake to over $200 million. But the benefits go far beyond personal wealth. This might mean that Dimon no longer has to live in Sandy Weills shadow. Has he eclipsed Sandy? asked someone who knows both well. Yes, he has. The only positive thing being written about Sandy these days is that Jamie learned from him. Adds a hedge-fund manager, Sandy Weill did wonderful things for Citigroup, but forcing Jamie Dimon out will forever taint his legacy.

When I bring up the inevitable topic of Citigroup with Dimon, he seems exasperated. He is clearly sick of being a character in someone elses legend. I left ten years ago, he said, then corrected himself. No, I didnt leave, I was fired. I was kicked out of the nest.

If he were inclined to, Dimon could easily gloat over the fact that JPMorgan has all but supplanted Citigroup as the preeminent financial conglomerate. The numbers say it all: JPMorgan is valued by investors at $158 billion, Citigroup just three quarters as much. JPMorgan is even mentioned now in the same breath as Goldman Sachs. So ascendant is Dimons reputation that he was recently able to lure an ex-Goldman partner out of retirementa feat which usually takes a governorship or cabinet postto become the companys chief risk officer. Theres no place Id rather be right now than working with Jamie and his team, says that new hire, Barry Zubrow.

Dimon seems ready for his new role as Wall Streets top dog. After explaining how the Bear Stearns deal will likely prove a good one for JPMorgan shareholders, he segued into a rationale for why it might also prove so for the entire economy. You have to keep in mind the financial conditions of the entire system, he said, when I asked him whether an appropriate example could have been set if Bear Stearns had been allowed to go under. Who are you really helping if everyone gets hurt? No, I dont think highly paid executives at any investment bank deserve to get bailed out. But at some point, youre just talking about various degrees of suffering.

Of course, JPMorgan didnt save the system on its own. The loans the company originally provided to Bear Stearns to keep it afloat had been guaranteed by the Fed, effectively making them risk-free. Would Dimon have done the deal without the backstop from the Fed? He pauses. It would have been very hard to do. Without the Fed to help mitigate the risk, to protect us from an overconcentration in some risky assets, Im not sure it was doable at all.

So how worried is Dimon about the risky assets that might be lurking in his firms own portfolio, stuff for which he doesnt have the luxury of a guarantee from the Fed, like, say, the companys derivatives exposure? JPMorgan had $77 trillion in so-called notional derivatives exposure at the end of 2007, a number that gives some derivatives doubters pause. After pointing out that JPMorgans net exposure is only $67 billiononly $67 billion? No worries, then!Dimon and his team scoff at the analysts suggestion that they dont understand the risks of such exposure. They say they understand them all too well. Look, if you dont worry in this business, youre crazy, Dimon said. Its not lurking in the back of my mind. He pointed to the center of his forehead. Its right here.


Inside Bear Stearns After the Collapse
A Financial Moron Explains the Crisis

https://nymag.com/news/features/45320/



Jamie Dimon Plans His Exit From JP Morgan Chase

John Carney
Sep 29, 2009, 4:21 PM

jamiedimon closeup tbiJamie Dimon has been heralded a the king of Wall Street. And everyone from investors in JP Morgan Chase to its employees, creditors and customers seems to share the same sentiment: Long live the King!

But Dimon will not run JP Morgan forever. And today he revealed that he is already developing an exit strategy. He appointed Jes Staley, the current head of JP Morgans asset management unit, to become head of the investment banking unit. Thats being read as putting Staley in direct line of succession to run the bank after Dimon.

"The timing was right to begin the succession process," Dimon said in a statement.
 
Jamie Dimon vs. Sandy Weill

In an excerpt from his soon-to be-published book, Last Man Standing, author Duff McDonald sheds new light on one of the most complicated personal relationships in modern American capitalism.

By Duff McDonald, contributor

Last Updated: September 18, 2009: 10:38 AM ET
l
Author Duff McDonald

NEW YORK (Fortune) -- In the annals of great business partnerships, few have achieved as much success -- or provided as much drama -- as that of Jamie Dimon and Sandy Weill. Starting in 1982, the two men worked side-by-side for sixteen years, a period during which they built a financial behemoth that included Smith Barney, Travelers and finally Citicorp. And then, in 1998, it was over. Just weeks after their greatest deal ever -- the merger of Travelers Group and Citicorp -- Weill fired his longtime protg, surprising colleagues, Wall Street, and Dimon himself.

The personality clash that came to a head in a shoving match at a West Virginia resort called The Greenbriar has proved to have had a huge impact on the landscape of high finance. What if Dimon had remained in Weill's good graces and gone on to succeed him at Citigroup? Where would Citigroup, currently a bank crippled thanks to investments in complex illiquid securities, be now if the risk-averse Dimon had been at the helm during the years leading up to the financial crisis? And where would JPMorgan Chase be if Dimon had never left Weil's side?

Despite feeling a profound sense of betrayal at the time -- one that has hardly subsided in the decade since -- Jamie Dimon chose to take the high road, and largely kept his thoughts on the end of the working relationship to himself. Until now. In this two-part excerpt, appearing today and tomorrow from journalist Duff McDonald's new book, Last Man Standing, Fortune offers up new information on their time together, the dramatic end to their union, and the fact that even today, the two men have largely been unable to bury the hatchet.

--Editor's Note: This story contains profanity.

Jamie Dimon began working for Sandy Weill when he was fresh out of Harvard Business School in 1982. At that point, Weill was already a minor legend on Wall Street, having built and sold Shearson Loeb Rhoades to American Express. Just 26 when he signed on as Weill's assistant, Dimon was no shrinking violet either, and practically demanded through hard work and a forceful personality that Weill treat him as a junior partner. Four years later, when Weill began building his second empire at Commercial Credit in Baltimore, Dimon was right there beside him.

Working with a group of veteran executives, Dimon soon earned the nickname "the kid." The combination of Dimon's shrewd number crunching and Weill's vision and salesmanship put the two men on course to make a series of bold acquisitions, starting with the foundering financial services conglomerate Primerica, which owned both Primerica Financial Services and the investment bank Smith Barney. (They would later add Travelers insurance to the mix.) In March 1990, Weill made Dimon an executive vice president at Primerica.

During the early Nineties, Dimon was closer to Sandy Weill than he'd ever been before. If a visitor dropped by Weill's house in Greenwich, Connecticut on a Sunday morning, Dimon's Volvo wagon was invariably parked in the driveway, the two men already hard at work by 7:00 a.m. Three months after adding the EVP title at Primerica, Dimon also added those of executive vice president and chief administrative officer of Smith Barney.

By September 1991, Weill decided to officially recognize what much of Wall Street had finally come to appreciate, that Jamie Dimon was a driving force at Primerica. Weill named Dimon, just 35 years old, president of the company, relinquishing the title to his protg. Weill had a peculiar style of mentoring, however. While he regularly rewarded Dimon, he often tested him by forcing power-sharing arrangements on him.

After making him chief administrative officer of Smith Barney in April 1991, for example, Weill then hired Bob Druskin away from Shearson Lehman, where he had been CFO, to be co-CAO with the younger man. Over the years Dimon would again and again find himself pitted against Wall Street heavyweights: first Frank Zarb, the former "Energy Czar" during the Ford Administration who was the chairman and CEO of Smith Barney from 1988 to 1993 and then veteran investment banker Robert Greenhill, who Weill installed as chief of Smith Barney after Zarb. The contradictory signals would eventually drive Dimon to an act of rebellion, but in the early part of the decade, he still held his boss on a pedestal, and took what he was given without much complaint.

It was in this period in Dimon's career that Weill began to develop his own doubts about Dimon as a successor. The reasons for Weill's losing faith in Dimon depend upon which associate of the two men you ask. Some feel it was Dimon's growing profile that irked Weill; others feel it was an incident involving Weill's daughter.

When a picture of the two men appeared in the New York Times showing Dimon in the forefront with Weill standing distantly behind, Weill was outraged. The headline of that July 1995 New York Times article was "Becoming His Own Man: At Travelers, Weill's Protg Is On the Move." Despite the fact that Weill had endorsed the idea of the story, many viewed the seemingly innocuous celebration of Dimon's talents as a critical turning point in his relationship with Weill. Weill came to see the article as an unforgivable transgression, even if Dimon obviously had nothing to do with the choice of photos in the story. "It's not good for Jamie to be getting this kind of publicity," Weill's wife Joan mentioned to Dimon's mother Themis in passing. (The two families had been friends since the 1970s, when Dimon's father Ted had worked for Weill.)

While Weill himself made several glowing remarks about Dimon in the Times piece, he was taken aback by the suggestion from a board member that implied Dimon -- not Weill -- was the central figure at Travelers. Joseph Califano, a Travelers director, had actually said exactly that: "He runs Smith Barney," said Califano, adding that Dimon was more and more the driving force at Travelers as a whole. Several people told Dimon that the story was going to cause him problems. They were right. Weill barged into a meeting the next day. "Who the fuck told Joe Califano to say that? And who chose that photo?"

Still, Dimon failed to initially recognize the shift in his boss' perspective. "I was still a little bit of a kid," recalls Dimon. "Weill's PR people orchestrated it. He knew about it. He knew better, and I didn't. But I don't think it was really about the picture. He looked more like a proud father in it than anything else. It was about Califano's quote. All of a sudden there was the question: 'Is Jamie really running this place?' I think that was what got to him."

And then there was the daughter. In 1994 Dimon had welcomed Weill's daughter, Jessica Bibliowicz, to Smith Barney as an executive vice president in charge of sales and marketing in the company's $55 billion mutual fund division. Bibliowicz would report to Dimon and not her father. In January 1995, Dimon named Bibliowicz chairman of the company's mutual fund operations, then the ninth largest in the country. He'd even pushed her ahead of a candidate favored by the company's head of asset management, Jeff Lane, taking some political heat in the process. But in reality, Bibliowicz only ran the mutual fund sales department, which had a mere 18 people in it. Despite the loftiness of the title, she didn't oversee money management, operations, or finance for the fund group.

Friends since childhood, the relationship between Dimon and Bibliowicz began to fray the next year, when Dimon pushed for the company to sell no-load mutual funds in response to the success of Vanguard and other no-load fund companies. Bibliowicz resisted the idea, arguing that the company should stick to its own internal funds -- brokers were far more motivated to sell them, after all, given the commissions -- and Weill himself sided with her in discussions on the subject. Dimon eventually won the debate, and in July 1996 Smith Barney was the first Wall Street broker to sell no-load funds.

Dimon increasingly became convinced that Bibliowicz's strengths were limited to "soft" skills, like marketing, and that she lacked a thorough enough understanding of the numbers of the business. He began to criticize her openly, alienating Bibliowicz and irritating Weill.

Not long after, in February 1997, Dimon committed what Weill regarded as another ignominy upon his daughter. He named three executives to the Smith Barney planning committee -- including Smith Barney's general counsel Joan Guggenheimer -- and excluded Bibliowicz. Weill's daughter felt it was a message directed squarely at her: A woman, yes, but not you. Guggenheimer, it should be pointed out, managed hundreds of people compared to Bibliowicz's 18. From Weill's perspective, though, it was an unforgivable slight. His reaction was one of near-hysteria.

The final, irreconcilable breach in Dimon and Bibliowicz's relationship came when Dimon actually acceded to Bibliowicz's ambition. When she asked him how she could get ahead in the company, he asked her what she aspired to. "Well, I'd love to run Smith Barney one day," she replied. Dimon told her that if that were ever going to happen, she needed experience in the retail side of the business. He then called Mike Panitch, who oversaw the retail branches, and asked him to put her in charge of one of the company's four divisions -- East, Midwest, Southwest, or West.

Panitch offered her California, offering the rationale that the other three states in the West division -- Nevada, Montana, and Idaho -- added too much travel and headache for someone settling into a new position, and assigned them to another division head. Dimon signed off on the arrangement as well, thinking that it wouldn't be a comedown for Bibliowicz, considering California's 2,100 or so brokers versus 2,700 for the four states combined. He was wrong. Bibliowicz felt slighted. Weill exploded when he found out. "You insulted her!" he raged to Dimon.

Ultimately, Bibliowicz decided to resign. Dimon told Bibliowicz she was doing the right thing. "Honestly, Jessica, you're not going to be treated properly around here anymore," he said. "Not everyone is telling you the truth. Not everyone is telling your father the truth. He's gotten too involved. You need your own life outside this company."

Years later, Weill still stews over how Dimon handled the situation. "I've said this to him in the past, and he doesn't like me to say it," recalls Weill. "I think Jamie built terrific loyalty from some people and developed a group of people who he really had great relationships with. Others bumped into that, and those that bumped into that, their fate was not great."

The last straw came for Dimon and Weill came with the arrival of Deryck Maughan to their growing financial services company. Maughan, a debonair Englishman, had been handpicked by Warren Buffett as CEO of Salomon Brothers after Buffett purchased 20% of the firm in the wake of a 1991 Treasury bond scandal. On September 24, 1997, it was announced that Travelers was buying Salomon for $9 billion. And Dimon now had a new bone to pick with his boss.

Although Dimon had been effectively running Smith Barney by himself since Greenhill's departure, the Salomon deal brought Maughan along with it, and Weill told Dimon that he had decided to make Maughan a co-CEO of Smith Barney alongside Dimon. Dimon was enraged. He reminded Weill that in previous negotiations with Salomon, Weill had indicated that Dimon would have complete control. But now, with the deal done, Weill refused to budge on the matter.

When Travelers had flirted with the idea of buying Salomon the previous year, Weill had told associates that he would fire Maughan if the deal were completed. To view him now as the answer to his problems was a stunning about-face. Within Travelers, there was a long-running joke about Sandy Weill's fickleness. If you walked by Weill's office and saw a new face, you might be moved to ask, "Who's that?" The answer: "That's Sandy's new best friend." Maughan would continue to become closer to Weill, often hanging around his office, while Dimon gave Weill a wide berth -- a tactical error that would create problems for him when Weill attempted the biggest merger of his career.

Read Part Two: When a banking feud got physical

Part one of two parts excerpted from Last Man Standing: The Ascent of Jamie Dimon and JP Morgan Chase, by Duff McDonald, to be published by Simon & Schuster on October 6, 2009. Duff McDonald To top of page

First Published: September 17, 2009: 10:08 AM ET

JPMorgan: The new king of Wall Street

Jamie Dimon's fighting words

https://archive.fortune.com/2009/09/16/news/companies/dimon_mcdonald_duff.fortune/index.htm

Eat At Dimon's?
While he is only 53 years old, Dimon does not want to run the bank until his grave. In fact, some close to him have said that Dimons exit might come sooner than expected by outsiders. Hes a very wealthy man who currently enjoys perhaps the best reputation of any CEO in America. There have been rumors that Obama might want to tap Dimon to run the Treasury Department. His wife told Duff McDonald, author of Last Man Standing, that Dimon fantasizes about opening his own restaurant and turning himself into Sam Malone of Cheers.

Dimon wont say exactly what he plans to do. But he has said there are two things he wont do: leave to run another big company or retire to just play golf.

Keeping Hope Alive For The Next Generation
Staley is the same age as Dimon and has been with JP Morgan since 1979. Hes worked in a wide variety of divisions of the bank. He headed equity capital markets and and private banking before landing in the asset management operation.

Heres why Staleys age matters. If a younger executive had been appointed, JP Morgan may have lost some of its leading junior executives who would have felt that their hopes to run the bank were dashed. Appointing another man Dimons age keeps open the possibility of becoming CEO for the likes of Chief Financial Officer Michael Cavanagh and Mary Callahan Erdoes, 42, the chief executive of JPMorgan's private bank who succeeds Staley as head of asset management.

Staley was the primary driver of JP Morgans acquisition of the hedge fund Highbridge Capital. He reportedly convinced a skeptical Dimon to go ahead with the acquisition. Following the acquisition, Highbridge grew from managing $7 billion to managing $21 billion.

Staley will probably keep JP Morgan out of the brokerage business. According to McDonalds Last Man Standing, Dimon was reportedly interested in acquiring a brokerage to bolster the banks equity unit. Staley feared this would conflict with the business of the private bank and opposed any such acquisition.

Exit Stage Left: Two Long Time JPM Vets
Currently, the investment banking unit is run by two co-CEOs, Bill Winters and Steve Black. Both were JP Morgan veterans dating back to before the merger with Chase. Winters, who for many years was focused primarily on the companys credit and trading businesses out of the London office, is leaving JP Morgan and Black, who oversaw investment banking out of New York, is becoming executive chairman of investment banking to oversee the transition until the end of 2010.

Theres no way around it: Winters, who is 47, and Black, who is 57, are being passed over as possible successors. Winters, at least, had previously expressed an interest in becoming CEO, the WSJ reports.

Both Winters and Black were deeply involved in the acquisition of Bear Stearns. Winters had been saying for years that JP Morgan would never acquire another investment bank, saying a merger would be the equivalent of putting 1 and 1 together and getting 1.2. He now defends the acquisition, saying it was a unique opportunity and the price was right.
https://www.businessinsider.com/john-carney-jamie-dimon-starts-to-plan-his-exit-from-jp-morgan-chase-2009-9


 Sandy Weill: I Fired Jamie Dimon Because He Wanted To Be CEO

John Carney
Jan 4, 2010, 4:07 PM

jamie dimon sandy weillSandy Weill pushed Jamie Dimon out of Citigroup because he was too ambitious.

The problem was in 1999 he wanted to be C.E.O. and I didnt want to retire, Weill told the New York Times. I regret that it came to that. I dont know what else could have been done except for him to be more patient.

It is an extraordinary admission from a man who built one of the largest banks in the world. Weill and Dimon were close business associates and friend for decades, with while in the mentor role to the much younger Dimon. Until Dimon was forced out, many assumed he would be Weils successor as head of Citi.

Over the years weve heard various explanations for the split. Some said it was Dimons reluctance to promote Weils daughter. Others have attributed the split to Weills jealousy over the media attention Dimon had begun to receive. Still others have said, in whispered voices, that Weil worried Dimon was plotting some kind of coup.

Now we learn from Weills own admission that it was his own reluctance to step aside that forced Dimon out. And he blames Dimon for his impatience. Keep in mind that Weill was 66 when Dimon was forced out and he retired just four years later. For the sake of those four years, apparently, the ship of Citi was wrecked.

Fascinatingly, Dimon seems to already be preparing to avoid this mistake. At just 53 years old, he has already promoted a likely successor.

Photo: Roger Ressmeyer/Corbis via New York Magazine
https://www.businessinsider.com/sandy-weil-i-fired-jamie-dimon-because-he-wanted-to-be-ceo-2010-1

Rough patch for J.P. Morgans Jamie Dimon

Published: May 11, 2012 at 4:18 p.m. ET

By MarketWatch

Slide show highlights career highlights of Wall Street lion

Jamie Dimon joined American Express AXP directly after completing business school at Harvard, reportedly spurning offers from Goldman Sachs, where hed interned during his graduate studies; Morgan Stanley; and Lehman Brothers. He is widely characterized as having become the protege of Wall Street legend Sanford Weill during his time at American Express.
Reuters .

Jamie Dimon, then 41, at a September 1997 press conference during which Travelers Group of which Dimon served as president and chief operating officer for seven years under mentor Sandy Weill announced its plans to purchase Salomon Brothers. A deal later that year brought Travelers and Citicorp together as Citigroup C.
Reuters .

Dimon was at Weills right hand at the formation of the financial-services behemoth Citigroup in 1998, where Dimon was tapped as president. He was also chairman and CEO of the Salomon Smith Barney unit. A much-discussed power struggle between Weill and Dimon reportedly paved the way for the latters departure from the company. Dimon resurfaced as chairman and CEO at Chicago-based Bank One.
Reuters .

J.P. Morgan CEO William Harrison (left) joins Dimon, Bank Ones chief executive since 2000, at the start of a January 2004 meeting in New York convened to discuss the merger of the two companies. That deal, announced Jan. 14 of that year, was one of the largest financial mergers in U.S. history.
Reuters .

Jamie Dimon poses for a portrait in his office in New York on Dec. 22, 2010.
Reuters .

Jamie Dimon and his wife, Judith, arrive at the White House for a state dinner hosted by President Obama and first lady Michelle Obama for President Hu Jintao of China in January 2011.
Reuters .

President Obama shakes hands with Jamie Dimon during a March 2009 meeting of business leaders at a hotel in Washington. A Democratic campaign donor, Dimon was rumored to be have been under consideration for a Cabinet post after Obamas election in November 2008.
Reuters .

Jamie Dimon talks with Goldman Sachs CEO Lloyd Blankfein before testifying before the Financial Crisis Inquiry Commission on Jan. 13, 2010.
Reuters .

Jamie Dimon is a member of the Federal Reserve of New Yorks board of directors.
Federal Reserve Bank of New York .

Dimon joins fellow top executives of TARP-recipient financial institutions in testifying before the House Financial Services Committee in February 2009. From left: Goldmans Blankfein, Dimon, Bank of New York's Robert Kelly, Bank of America's Ken Lewis, State Street's Ronald Logue, Morgan Stanley's John Mack and Citi's Vikram Pandit.
Reuters .

The 2009 biography Last Man Standing: The Ascent of Jamie Dimon and J.P. Morgan Chase depicts Dimon as one reason for optimism that a post-crisis Wall Street was ready for reform, according to Paul M. Barretts review in the New York Times.
Simon & Schuster
https://www.marketwatch.com/story/rough-patch-for-jp-morgans-jamie-dimon-2012-05-11

Citigroup: Sandy Weill's Jealous Because Jamie Dimon Succeeded Where He Failed

Sep. 24, 2012 1:56 PM ET
|About: Citigroup Inc. (C), Includes: JPM

We used to admire Sanford I. Weill for his career in the financial services industry and for his role in creating Citigroup (NYSE:C). We were most impressed with the fact that Citigroup was able to grow its EPS in 2001 and 2002 during the implosion of the dot-com bubble. We were impressed with the fact that Sandy Weill brought together leading financial services firms like Citibank (the world's most recognized name in consumer banking), Smith Barney (a premier wealth manager), Salomon Brothers (a leading bond trading and investment banking organization) and Travelers Insurance (a leading diversified insurance institution). Because of the blowback from the dot-com crisis and corporate scandals, Sandy Weill decided to step aside as CEO...
https://seekingalpha.com/article/885051-citigroup-sandy-weills-jealous-because-jamie-dimon-succeeded-where-he-failed



Sneak Attack Blinds J.P. Morgan Shareholders Ahead of Dimon Vote

by Beecher Tuttle 17 May 2013

A firm you have probably never heard of, which does a job you probably didnt think was necessary, may have just boosted J.P. Morgan Chief Executive Jamie Dimons chances of holding on to his role of chairman.

New York-based Broadridge has, what is on the surface, a rather minor role in proxy decisions. It tallies up votes as they come in and passes the information on to the firm in question as well as to the shareholders who sponsored the proposal. For all intents and purposes, Broadridge is a scoreboard. The problem is the power just went out on the visitors side of the ledger.


With only a handful of days left until the non-binding vote on Dimons fate as chairman, Broadridge stopped providing updated tabulations to the proxy sponsors, according to the New York Times. Wall Streets chief lobby group, the Securities Industry and Financial Markets Association (SIFMA), which represents companies like J.P. Morgan, asked Broadridge to cut the information flow to the sponsors, something senior executive Lyell Dampeer said he was contractually obligated to do, according to the Times.

So the sponsors are now blind to the score, leaving them unsure of how to shape their campaign strategy, and more than a bit angry. Theres still plenty left to be fighting for; only around 40% of the vote is in. A crafty move by J.P. Morgan and SIFMA to say the least. If nothing else, it shows how seriously J.P. Morgan and all of Wall Street really is taking the vote.

If Dimon goes down, just imagine how other CEOs who simultaneously hold chairman roles will feel. They likely didnt just lead their firm to a record year in terms of profit, as Dimon just did.

The (Real) Life of an Investment Banker (eFinancialCareers)

Investment bankers make plenty of money, but it often comes at a price, for the bankers and their families. This screenshot, taken by an investment banking source at Barclays, paints this picture with clear strokes.

First of Many (Washington Post)

The IRS scandal has claimed its first victim. Acting Commissioner Steven Miller resigned under pressure from the White House.

Bye Bye Bloomberg (WSJ)

FX traders at Citi are saying goodbye to Bloombergs chat tool, moving to the firms proprietary technology. The decision was not prompted by the Bloomberg spying scandal, said a Citi spokesperson.

Rain Woman (WSJ)

The wife of Tom Hayes, the UBS and Citi trader charged with insider trading, has only eight followers on Twitter, but thats likely to change. Sarah Hayes, AKA Rain Mans better half, has been tweeting about utterly ridiculous insider prison sentences and other justice system foibles.

M&A Push (NY Times)

J.P. Morgan has named Hernan Cristerna and Chris Ventresca as co-heads of global mergers and acquisitions, two newly created roles.

Hes Baaaack (Bloomberg)

Former Citigroup Chief Executive Officer Vikram Pandit has a new gig. Pandit, who was pushed out by Citis board in a headline-grabbing coup, will take a leadership role in Indias JM Financial.

A Good Loser (FIN Alternatives)

British hedge fund manager Talal Shakerchi lost $1.4 million during a single night of poker. "Goodbye. See you guys tomorrow," he said calmly after leaving the table around 5:30 a.m.

Buzz Around the Office

We Listen to Our Shareholders (WSJ)

Joseph Morea was forced to resign from the board of real estate investment trust CommonWealth after failing to earn enough shareholder votes. He wasnt out of work long. The board voted Morea right back into the vacant seat.

List of the Day: Being a Good Boss

Being a good employee doesnt always translate into being a good boss. When promoted, do this.
1.Know what tasks your employees are good at.
2.When they screw up, cover their backside.
3.Dont do all the work yourself.
(Source: Wall Street Oasis)
2019. All rights reserved.
https://www.efinancialcareers.com/news/2013/05/sneak-attack-blinds-j-p-morgan-shareholders-ahead-of-dimon-vote

 Citibank Sells OneMain Financial to Springleaf

Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By
Nick Clements

Updated on Tuesday, March 3, 2015

MagnifyNews-02-01

Citibank announced today that it is selling OneMain to Springleaf Finanial for $4.25 billion. Citi has been trying to sell OneMain for years. It all began when Vikram Pandit was CEO (after the financial crisis), and he created a bad bank (called Citi Holdings). At the time, no one wanted to buy OneMain because it was a subprime lending company that was capital market funded. In fact, the head of Citi Holdings at the time was Mike Corbat (who is now CEO), and he was ready to accept as little as $1.0 billion for the unit. No one would write a check that big.

A lot has changed in 5 years. In a world of 0% interest rates, investors are hungry for the yield that subprime assets can potentially offer. OneMain, which historically took less risk than other subprime lenders, weathered the storm well and was generating hundreds of millions of earnings. And Springleaf, which rose from the ashes of American General (which was owned by AIG) is looking to continue its growth. As a combined entity, OneMain and Springleaf will be the largest stand-alone subprime lender in the United States, with over $14 billion in assets and more than 2,000 offices.

This is the end of an era for Citigroup, and represents the divestment of the last big part of the old Travlers Group. In fact, Citigroup would never have existed had it not been for OneMain and its roots in Baltimore.

Remember Sandy Weill?

Sandy Weill and Jamie Dimon (now the CEO of JP Morgan Chase) got their start together with a sleepy consumer finance company in Baltimore called Commercial Credit, which would later be renamed CitiFinancial and ultimately OneMain. (The name Commercial Credit is misleading: they did not make any commercial loans). Together, they turned around Commercial Credit and used it as a platform for further acquisitions. They swallowed the larger Primerica Fiancial Services. Then they bought Smith Barney. And then they bought Travelers Insurance, creating TravelersGroup.

Ultimately, in 1998, Citibank and TravelersGroup merged to create Citigroup. The combined business continued to grow and generate incredible earnings. Unfortunately for Citi shareholders, a fight between Sandy Weill and Jamie Dimon led to Jamies departure. Sandy then passed over Bob Willumstad for the CEO role and instead appointed Chuck Prince, who spent 4 years dramatically increasing the risk exposure of the bank. He is famous for telling shareholders that as long as the music is playing, youve got to get up and dance. And dance he did. As late as 2007, he bought a mortgage company (Ameriquest). At the time of the ill-fated acquisition, Citigroup stated that its going to be a nonconforming shop, and we are going to originate along the continuum, from jumbo loans, to Alt-A to subprime.

As Citi piled on subprime assets at the worst possible time, Jamie Dimon was avoiding subprime mortgages completely at JP Morgan Chase. Citi would ultimately require $45 billion of taxpayer money to stay afloat. Vikram Pandit embarked on a plan to return Citigroup to the old Citicorp, and in the process he would shed most of the TravelersGroup businesses.

Travelers Insurance and Primerica are now both stand-alone, public companies. Smith Barney was sold to Morgan Stanley, and with OneMains sale to Springleaf, Citibank today looks a lot like the Citicorp of yesterday.

Big questions remain for Citibank. In the US, they still have a very small retail bank. And they were slow to compete in the credit card space, losing significant market share to Chase. They are now trying to buy market share, as the Costco deal indicates. However, they will likely be paying a significant premium to steal the business. Just as OneMain starts to generate significant earnings, they swap out those assets for lower margin products targeting more affluent customers. It will be interesting to see how Citi grows within its strategy through the recovery.

And, as for OneMain, it is truly the end of an era. The business that was the first chapter in Citigroup and, to a large extent JP Morgan, is now in the hands of Springleaf.

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https://www.magnifymoney.com/blog/news/citibank-sells-onemain-financial-springleaf/ 

JPMorgan and Goldman, Under Criminal Probes, Close in the Red Despite Trading their Own Bank Stocks in their Own Dark Pools

By Pam Martens and Russ Martens: December 20, 2019 ~

Goldman Sachs and JPMorgan Chase LogosAll three major stock indices set new highs yesterday. The Nasdaq led with a 0.67 percent gain; the Dow Jones Industrial Averaged closed with a 0.49 percent increase while the S&P 500 inched up 0.45 percent. Stocks have been setting new highs all week as the New York Fed funnels tens of billions of dollars each day to Wall Streets trading houses to quench a liquidity crisis whose existence has seemed to escape stock trading desks on Wall Street.

The stock markets week of new highs comes at a curious time. For only the third time in history, a sitting U.S. President was impeached this past week by the U.S. House of Representatives and the Democratic candidates for President wasted no time in last nights debate drilling down to why this happened. The words corrupt and corruption were used repeatedly by candidates to describe the state of affairs in Washington. But not one candidate mentioned Wall Street the epicenter and financier and primary beneficiary of that corruption.

Just how deep that nexus between corruption on Wall Street and corruption in Washington runs was on display yesterday as the Wall Street Journal reported that the U.S. Department of Justice is prepared to settle its criminal investigation of Goldman Sachs in exchange for a fine of approximately $2 billion from one of its subsidiaries. The criminal investigation stems from the Wall Street behemoth twiddling its thumbs as $4.5 billion it had raised in bond sales was looted from its client, Malaysias sovereign wealth fund known as 1MDB. The looted funds were alleged to have been used to bribe foreign officials to obtain bond business for Goldman Sachs, pay kickbacks to employees of Goldman Sachs involved in the scheme, as well as to buy yachts, artwork and fund the production of Hollywood movies, including The Wolf of Wall Street by outsiders involved in the scheme.

Tom Leissner, a former partner at Goldman Sachs who had worked for the firm for more than two decades, pleaded guilty in the U.S. in 2018 to charges of bribery, conspiracy and money laundering for his role in the 1MDB scandal. Another Goldman employee who was charged, Roger Ng, has pleaded not guilty and his case is currently pending in federal court in New York.

The attorney general of Malaysia has filed a criminal indictment against Goldman Sachs in the matter.

The stock market showed how it has become desensitized to criminal activities on Wall Street: it shaved just 0.22 percent off Goldmans share price but did force it to close in the red while the market was setting new highs.

Perhaps trading in sympathy with the Goldman criminal probe was JPMorgan Chase. Its stock also closed in the red yesterday with a loss of 0.50 percent. JPMorgan Chase, which received a combined three felony counts under deferred prosecution agreements during the Obama administration, is currently under a criminal probe over U.S. Department of Justice charges that its traders turned its precious metals desk into a racketeering criminal enterprise over a period of eight years.

Goldman Sachs and JPMorgan Chase closing in the red yesterday might not be so noticeable were it not for the fact that peer banks Citigroup and Morgan Stanley closed in the green on the same day.

The public has no way to know just how deep in the red the mega banks on Wall Street might have closed yesterday or in recent months because the U.S. Securities and Exchange Commission (SEC) is, insanely, allowing these banks to trade the shares of their own bank, as well as the shares of their peer banks, in Dark Pools they own and operate. Dark Pools function as lightly-monitored stock exchanges owned by the major banks on Wall Street. (See Wall Street Banks Are Trading in Their Own Companys Stock: How Is This Legal?)

During the week of November 25, the most recent week for which data is made available by Wall Streets self-regulator, FINRA, Goldman Sachs Dark Pool, Sigma-X, traded 22,136 shares of its own stock in 228 separate trades. The mega bank, UBS, however, with whom Goldman does a great amount of counterparty business, traded 262,804 shares of Goldman Sachs stock in 4,074 separate trades in just that one week in its Dark Pool, UBSA.

The public has no way to know just how many shares of Goldmans stock its own Dark Pools traded because in addition to its U.S. Dark Pool, Goldman owns Dark Pools that trade on three other continents.

For the same week, JPMorgan Chases Dark Pool, JPM-X traded 265,906 shares of JPMorgans stock in 1,912 separate trades. That made it the second largest Dark Pool trader of its own stock that week, just behind UBSA which traded 475,306 shares of JPMorgans stock in 5,238 separate trades.

But JPMorgan also owns another, algorithm-based Dark Pool, JPB-X, that traded another 88,182 shares of JPMorgans stock the same week in 1,308 separate trades.

Under a sane and functioning Securities and Exchange Commission or federal regulatory regime, banks trading their own stocks in darkness while holding trillions of dollars in federally-insured deposits would result in perp-walks, not in elevating their outside counsel to Chairman of the Securities and Exchange Commission.

The data that FINRA is making available to the public has cleverly been gutted to make sure that no math whizzes in academia have the ability to reverse engineer the data into successful charges of market rigging, as occurred previously in a forensic probe by academics Christie and Schultz in 1994 into how Wall Street firms were engaged in tacit collusion on the Nasdaq stock market.

FINRAs Dark Pool data does not show hourly or daily trading, just weekly totals; it does not show if the prices paid for the shares were in keeping with the rest of the market. And, it does not show what party was on the opposite side of the trade. For all the public knows, banks that own more than one Dark Pool could be making a two-sided market in their own shares.

https://wallstreetonparade.com/2019/12/jpmorgan-and-goldman-under-criminal-probes-close-in-the-red-despite-trading-their-own-bank-stocks-in-their-own-dark-pools/



JPMorgan Chase and Citibank Have $2.96 Trillion in Exposure to Credit Default Swaps

Credit Default Swap Exposure at JPMorgan Chase and Citibank

By Pam Martens and Russ Martens: March 22, 2020 ~

According to the most recent report from the regulator of national banks, the Office of the Comptroller of the Currency (OCC), JPMorgan Chase has exposure to $1.2 trillion in Credit Default Swaps while Citibank has exposure to $1.76 trillion for a combined total of $2.96 trillion as of September 30, 2019.

According to the same report, the total exposure to Credit Default Swaps among all national banks in the U.S. is $3.7 trillion meaning that just these two banks are responsible for 80 percent of that exposure.

As of this past Friday, JPMorgan Chase had lost 39.3 percent of its common equity capital in the past five weeks while Citigroup, parent of Citibank, had lost 51.7 percent. That left JPMorgan Chase with just $256.68 billion in market cap versus Citigroups meager $79.86 billion.

One of our readers emailed us today asking if Credit Default Swaps were still around after they had collapsed Wall Street and the U.S. economy during the 2008 financial crash. Not only are these derivatives of mass destruction still around thanks to lapdog federal regulators and a timid Congress but two of the most dangerous banks in America have not just purchased protection through Credit Default Swaps, but they have sold protection (taken on the risk of a defaulting corporation or credit) to the tune of $1.5 trillion.

Since the repeal of the Glass-Steagall Act in 1999, these giant Wall Street casino investment banks have been allowed to own some of the largest federally-insured banks in America where moms and pops hold their life savings. JPMorgan owns the federally-insured Chase Bank which has more than $1.6 trillion in deposits. Citigroup owns Citibank which holds approximately $1 trillion in deposits.

Its certainly not that the federal regulators think that these two banks know how to manage risk and thus they can be trusted with Credit Default Swaps. Citigroup was the biggest basket case among all federally-insured banks during the 2008 financial crisis. Citigroup received the largest taxpayer-bailout of any bank in U.S. history as its stock went to 99 cents. Its bailout haul included an infusion of $45 billion in capital from the U.S. Treasury; a government guarantee of over $300 billion on its dubious assets; a guarantee of $5.75 billion on its senior unsecured debt and $26 billion on its commercial paper and interbank deposits by the FDIC; and a secret revolving loan facility from the Federal Reserve that sluiced a cumulative $2.5 trillion in below-market-rate loans from 2007 to the middle of 2010. (See chart below from the Government Accountability Office audit.)

JPMorgan Chase, which has retained the same Chairman and CEO, Jamie Dimon, through three guilty pleas to criminal felony counts and is under a new, ongoing criminal probe for turning its precious metals desk into a racketeering enterprise, should have been permanently banned from engaging in derivative trades in 2012. That was when Jamie Dimon allowed a woman with no trading licenses, Ina Drew, to supervise traders in London who gambled with hundreds of billions in depositors money and lost at least $6.2 billion making bets on exotic derivatives. It became known as the London Whale scandal. That case was so serious that it was investigated by the FBI and the U.S. Senates Permanent Subcommittee on Investigations, which wrote this about the matter:

The JPMorgan Chase whale trades provide a startling and instructive case history of how synthetic credit derivatives have become a multi-billion dollar source of risk within the U.S. banking system. They also demonstrate how inadequate derivative valuation practices enabled traders to hide substantial losses for months at a time; lax hedging practices obscured whether derivatives were being used to offset risk or take risk; risk limit breaches were routinely disregarded; risk evaluation models were manipulated to downplay risk; inadequate regulatory oversight was too easily dodged or stonewalled; and derivative trading and financial results were misrepresented to investors, regulators, policymakers, and the taxpaying public who, when banks lose big, may be required to finance multi-billion-dollar bailouts.

With an indictment like that, it is nothing short of a regulatory failure of epic proportions that these Wall Street banks are still endangering the safety and soundness of the U.S. banking system and U.S. economy with their wild derivative exposures.

There is no question at all that derivatives played a central role in the 2008 financial collapse the worst financial and economic implosion in the United States since the Great Depression of the 1930s. In 2010, Gary Gensler, the Chairman of the Commodity Futures Trading Commission, said this about the role of derivatives in the financial collapse:

OTC derivatives were at the center of the 2008 financial crisis. They added leverage to the financial system with more risk being backed up by less capital. U.S. taxpayers bailed out AIG with $180 billion when that companys ineffectively regulated $2 trillion derivatives portfolio, managed from London and cancerously interconnected to other financial institutions, nearly brought down the financial system. As we later learned, much of the bailout money flowed through AIG to U.S. and European banks. These events demonstrate how over-the-counter derivatives initially developed to help manage and lower risk can actually concentrate and heighten risk in the economy and to the public.

This is the chart from the Financial Crisis Commission report that shows that more than half of the $185 billion bailout money given to AIG ended up in the hands of Wall Street banks, foreign global banks, and hedge funds to pay off its derivative bets and securities lending agreements.

On June 30, 2010, Phil Angelides, the Chair of the Financial Crisis Inquiry Commission, had this to say at a hearing convened specifically to examine The Role of Derivatives in the Financial Crisis.

I must say that despite 30 years in housing, finance, and investment in both the public and private sectors I had little appreciation of the tremendous leverage, risk, and speculation that was growing in the dark world of derivatives. Neither, apparently, did the captains of finance nor our leaders in Washington.

The sheer size of the derivatives market is as stunning as its growth. The notional value of over the-counter derivatives grew from $88 trillion in 1999 to $684 trillion in 2008. Thats more than ten times the size of the Gross Domestic Product of all nations. Credit derivatives grew from less than a trillion dollars at the beginning of this decade to a peak of $58 trillion in 2007. These derivatives multiplied throughout our financial markets, unseen and unregulated. As Ive explored this world, I feel like I have walked into a bank, opened a door, and seen a casino as big as New York, New York. Unlike Claude Rains in Casablanca we should be shocked, shocked that gambling is going on.

As the financial crisis came to a head in the fall of 2008, no one knew what kind of derivative related liabilities the other guys had. Our free markets work when participants have good information. When clarity mattered most, Wall Street and Washington were flying blind

Tragically, despite the human suffering of the millions of innocent Americans who lost their jobs and their homes and their life savings in the financial crash of 2007-2010, Washington has allowed the Wall Street casino to be every bit as dangerous today as it was then.

And at a time of national crisis when our federal leaders should be focusing on providing help to families and businesses that are being devastated by the coronavirus, the Federal Reserve is instead engaged in a new, multi-trillion dollar bailout of Wall Street banks, whose crisis began on September 17, 2019 five months before the first case of coronavirus was diagnosed in the U.S.

GAO Data on Emergency Lending Programs During Financial Crisis
GAO Data on Feds Emergency Lending Programs During Financial Crisis

← Five Mega Wall Street Bank Stocks Have Lost Average of 45 Percent in Five Weeks

For First Time in History, Fed to Make Billions in Loans to Big and Small Businesses →

2020 Wall Street On Parade. Wall Street On Parade is registered in the U.S. Patent and Trademark Office. WallStreetOnParade.com is a financial news website operated by Russ and Pam Martens to help the investing public better understand systemic corruption on Wall Street. Ms. Martens is a former Wall Street veteran with a background in journalism. Mr. Martens' career spanned four decades in printing and publishing management.

The Feds Emergency Loan Operations to Wall Streets Trading Firms Began on September 17, 2019 Months Before the Coronavirus COVID-19 Had Emerged in China or Anywhere Else in the World. That Strongly Suggests to Us that Wall Street Banks Had a Serious Problem Independent of the Virus Outbreak. Mainstream Media Refused to Cover this Story in any Depth, Leaving the Heavy Lifting to Wall Street On Parade, Which Has Since that Time Written More than Ten Dozen Articles Chronicling this Fed Bailout. Click on this Text to Read Our Full Series of Articles.

https://wallstreetonparade.com/2020/03/jpmorgan-chase-and-citibank-have-2-96-trillion-in-exposure-to-credit-default-swaps/

Latest Disclosed Value $ 41,000
Jpmorgan Chase & Co reports 94.13% decrease in ownership of HTZ / Hertz Global Holdings, Inc.
August 11, 2020 - Jpmorgan Chase & Co has filed a 13F-HR form disclosing ownership of 29,480 shares of Hertz Global Holdings, Inc. (US:HTZ) with total holdings valued at $41,000 USD as of June 30, 2020. Jpmorgan Chase & Co had filed a previous 13F-HR on May 12, 2020 disclosing 502,535 shares of Hertz Global Holdings, Inc. at a value of $3,106,000 USD. This represents a change in shares of -94.13 percent and a change in value of -98.68 percent during the quarter.

Jpmorgan Chase & Co has a history of taking positions in derivatives of the underlying security (HTZ) in the form of stock options. The firm currently holds 0 call options valued at $0 USD and 0 put options valued at $0 USD .

Other investors with positions similar to Jpmorgan Chase & Co include Canada Pension Plan Investment Board, Cubist Systematic Strategies, LLC, Numeric Investors Llc, Great West Life Assurance Co /can/, Hollencrest Securities Llc, and Aperio Group, LLC.

Jpmorgan Chase & Co reports 94.13% decrease in ownership of HTZ / Hertz Global Holdings, Inc.
13F Filings
https://fintel.io/so/us/htz/jpmorgan-chase-

Press Release
SEC Charges Hertzs Former CEO With Aiding and Abetting Companys Financial Reporting and Disclosure Violations
FOR IMMEDIATE RELEASE
2020-183

Washington D.C., Aug. 13, 2020
The Securities and Exchange Commission today charged former Hertz CEO and Chairman Mark Frissora with aiding and abetting the company in its filing of inaccurate financial statements and disclosures. Frissora has agreed to settle the charges and repay Hertz nearly $2 million in incentive-based compensation.

The SECs complaint alleges that as Hertzs financial results fell short of its forecasts throughout 2013, Frissora pressured subordinates to find money, principally by re-analyzing reserve accounts, causing Hertzs staff to make accounting changes that rendered the companys financial reports materially inaccurate. According to the complaint, Frissora also led Hertz to hold rental cars in its fleet for longer periods and thus lower its depreciation expenses, without properly disclosing the change and the risks of relying on older vehicles to investors. In addition, the complaint alleges that Frissora approved Hertzs reaffirming its earnings guidance in November 2013, despite Hertzs internal calculations that projected lower earnings per share figures. Hertz revised its financial results in 2014 and restated them in July 2015, reducing its previously reported pretax income by $235 million.

Investors are entitled to accurate and reliable disclosures of material information about a companys financial condition, said Marc P. Berger, Director of the SECs New York Regional Office. We are committed to holding corporate executives accountable when their actions deprive investors of such information.

The SECs complaint, filed in federal district court in New Jersey, charges Frissora with aiding and abetting Hertzs reporting and books and records violations and with violating Section 304 of the Sarbanes-Oxley Act by failing to reimburse Hertz for the requisite amount of incentive-based compensation he received. Without admitting or denying the allegations, Frissora consented to a judgment permanently enjoining him from aiding and abetting any future violations of the applicable federal securities laws, requiring him to reimburse Hertz for $1,982,654 in bonus and other incentive-based compensation and requiring him to pay a $200,000 civil penalty. The settlement is subject to court approval.

In December 2018, Hertz agreed to pay $16 million to settle related fraud and other charges brought by the SEC and in December 2019, the SEC issued a settled Order against Hertz former Controller Jatindar Kapur.

The SECs investigation was conducted by Jess Velona, Kenneth Byrne, Christopher Mele, and Adam Grace of the New York Regional Office, and was supervised by Sanjay Wadhwa.

###

https://www.sec.gov/news/press-release/2020-183

https://www.sec.gov/litigation/complaints/2020/comp-pr2020-183.pdf


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Opinion
Jamie Dimon





The gun that got into Jamies bank


The weapon in JPMorgans hands is a symbol of one of the banks biggest problems: weirdness

Gary Silverman



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Jamie Dimon


















Gary Silverman in New York

October 24 2013

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I learnt about the gun a few days ago as I poked around the history section of the JPMorgan Chase website. Among the companys various possessions, it revealed, was the weapon that had been used by one of its own to murder a rival who dared to get in his way.The deed was done long ago on July 11 1804, to be precise in a galaxy far, far away, which is to say Weehawken, New Jersey, and more than eight decades have passed since the pistol that fired the fatal shot was acquired by one of JPMorgans predecessor banks.But despite the passage of time, that firearm struck me as strangely relevant to todays Wall Street. There is no bigger story in financial circles at the moment than the travails of Jamie Dimon, JPMorgans chief executive, and I think the weapon in his banks hands is a symbol of one of Mr Dimons biggest underlying problems: the vast wellsprings of weirdness that sit beneath some of our more august financial institutions.Mr Dimon is under the gun because US authorities have decided that the time has come for big banks to pay for mis-selling mortgages in the years leading up to the financial crisis. His bills look to be particularly large because he is not only having to cover the costs of the bank that he ran at that time; he is also being forced to pay for the sins of two companies JPMorgan bought Bear Stearns and Washington Mutual as the subprime excreta hit the fans of finance in 2008.Mr Dimons defenders argue that it is unfair to hold him accountable for misdeeds that took place at banks before he ran them and they have a point. I would also ask whether it is fair to expect Mr Dimon or anyone to understand so many corporate cultures and integrate so many complex operations without suffering accidents of some kind.Todays JPMorgan is more than a bank. It is a collection of banks built on the foundation of more than 1,200 predecessor firms, as its website says. Over time, it has absorbed operations as diverse as Queen Elizabeths brokers at Cazenove, the Corn Exchange Bank of New York and Springfield Marine and Fire Insurance of Illinois which counted Abraham Lincoln as one of its first depositors (he was good for $310).The darkness potentially lurking in any of these financial corners is illustrated by the story of the gun held by JPMorgan. Symbolically, it goes back to the founding of the first of JPMorgans predecessor firms, the Manhattan Company, established in 1799 by a group of prominent New Yorkers including Aaron Burr, the future vice-president of America.From the start, the Manhattan Company was not exactly what it seemed. It secured a charter from the New York state legislature to supply pure and wholesome water to New York City. But a clause added by some cunning soul gave it the latitude to play around with its excess capital, which led it to form the citys second commercial bank.This didnt help Burrs relations with Alexander Hamilton, the former Treasury secretary who had helped launch the citys first commercial bank, the Bank of New York. Rivals in politics and nearly everything else, the two men eventually settled their differences with a duel in 1804. Burr shot Hamilton dead, then went back to Washington and served out the rest of his term as vice-president, helping to set the bar for that office at the low level at which some political analysts would undoubtedly say it remains today.Burrs gun wound up in Mr Dimons bank through a dizzying series of deals that makes you realise how it is also possible for sophisticated bankers to pick up billions of dollars in legal liabilities without really trying. First, the pair of pistols used in the duel which I guess had sentimental value for bankers longing for the days when they could literally get away with murder were bought by Burrs old Manhattan bank. Then the Chase and Manhattan banks combined; Chemical absorbed that lender and took its name; Chase Manhattan swallowed JPMorgan, called itself JPMorgan Chase, acquired Chicagos Bank One, and, in that last deal, brought Mr Dimon into his current pistol-packing fold.The irony is that the last thing Mr Dimon needs in his current condition is a murder weapon on his premises. Its just not him, in any case. Whatever you say about Mr Dimon and I have said some there is no evidence he ever crossed the river to Jersey and whacked anybody. Hes a decided improvement over his predecessors, in that sense. gary.silverman@ft.com
Gary Silverman
https://www.ft.com/content/7470cb0c-3bf5-11e3-9851-00144feab7de