A bad day for Jamie Dimon just got a lot worse
Wall Street sheriff Preet Bharara directed both barrels at JPMorgan Chase on Wednesday afternoon, and he aimed his sights high.
While a news conference the U.S. attorney held ostensibly was to detail charges against two traders responsible for a $6 billion loss, there was a strong undertone of criticism straight at company CEO Jamie Dimon.
When news of the “London Whale” trade losses hit, Dimon called the matter a “tempest in a teapot.”
Without mentioning him by name, Bharara said Dimon was dead wrong.
"This was not a tempest in a teapot, but rather a perfect storm of individual misconduct and inadequate internal controls," he said.
The remarks were part of blistering criticism Bharara leveled not only at the defendants but also at JPMorgan's top management.
"The difficulty inherent in precisely valuing certain kinds of financial positions does not give people a license to mislead or cover up losses," he said. "That goes double for handsomely paid executives at public companies whose actions can roil markets and upend an economy."
JPMorgan declined to comment on the charges.
The charges, as well as Bharara’s demeanor, underscore a tough stand against the biggest of the big on Wall Street that he stated emphatically at the “Delivering Alpha" conference presented by CNBC and Institutional Investor in July.
JPMorgan, and Dimon himself, stood Wednesday as major examples.
"Capitalism works best when its participants do not lie and cheat. Capitalism works best when its biggest beneficiaries play by the same rules as everyone else," Bharara said. "That is why prosecutors need to be even more aggressive, regulators need to be even more vigilant, companies themselves need to pay close attention to the cultures they create."