Jamie Dimon is sorry — no, really.
In a rare show of humility, the bank chieftain apologized profusely to JPMorgan’s shareholders and regulators for the “London Whale” debacle that resulted in more than $6 billion in trading losses.
The massive, wrong-way bet on credit derivatives was “the stupidest and most embarrassing situation I have ever been a part of,” Dimon wrote in his annual letter to shareholders yesterday.
“I deeply apologize to you, our shareholders, and to others, including our regulators, who were affected by this mistake,” he said in a 30-page letter.
When the whale trade first surfaced last April, a defiant Dimon dismissed it as a “a complete tempest in a teapot.”
But the out-of-control trade ended up blowing a $6.2 billion hole in the bank’s balance sheet, leading to hearings on Capitol Hill, a management shake-up and questions about Dimon’s reputation as a top risk manager.
As punishment, the board slashed Dimon’s pay by half, to $11.5 million.
In his shareholder letter yesterday, Dimon, who has been an outspoken critic of stricter regulations in the wake of the financial meltdown, struck a more conciliatory tone.
He said the bank had received regulatory orders “requiring improved performance in multiple areas, including mortgage foreclosures, anti-money laundering procedures and others.”
He added that he expects more sanctions and promised to “do all the work necessary to complete the needed improvements identified by our regulators.”
It’s a far cry from the tone Dimon struck in last year’s letter, which came a day before the whale trade became public. Dimon blasted lawmakers and regulators for making the “recovery worse than it otherwise would have been,” and for “uncoordinated and inconsistent” rule-making.
His woes are far from over. Dimon faces criticism from some shareholders who want the bank to split his dual role as chairman and CEO. Shareholders will vote on the proposal ahead of the bank’s annual meeting on May 21.
Last year, the proposal garnered significant support, with 40 percent of votes cast in favor. That figure could rise in the wake of the whale debacle.