ML-Implode News - JPMorgan Faulted on Controls and Disclosure in Trading Loss

JPMorgan Chase ignored internal controls and manipulated documents, while its influential chief executive, Jamie Dimon, briefly withheld some information from regulators as the nation's biggest bank racked up trading losses last year, a new Senate report says.
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The report, citing some of the same private documents that F.B.I. agents are now poring over, highlighted how JPMorgan managers "pressured" traders to underreport losses by $660 million, a previously undisclosed figure, and then played down the problems to authorities.

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JPMorgan, the subcommittee noted, "mischaracterized high-risk trading as hedging," or mitigating risk, a strategy that is allowed under the Volcker Rule. The bank's chief financial officer, Douglas Braunstein, told analysts in April that the position "is consistent" with a proposed version of the Volcker Rule, a conclusion that the subcommittee dismissed as false.

One regulator wrote in a May 2012 internal e-mail that the position was a "make believe voodoo magic â€˜composite hedge.'"

Relevant:

JPMorgan Faulted on Controls and Disclosure in Trading Loss - Senate Report