J.P. Morgan hires former SEC enforcement chief to respond to investigations
By Bloomberg | May 22, 2012 5:17 pm
William McLucas, former SEC enforcement chief, was hired by J.P. Morgan Chase to help respond to regulatory probes of the firm’s $2 billion trading loss, according to two people with knowledge of the assignment.
The lender’s May 10 announcement of the “self-inflicted” loss spurred reviews by the SEC, CFTC, Office of the Comptroller of the Currency, and FBI. J.P. Morgan has said the losses may increase.
Kristin Lemkau, a company spokeswoman, didn’t have an immediate comment on the hiring. The people requested anonymity because the appointment hasn’t been made public.
Investigators may focus on how J.P. Morgan disclosed the risk of losses, SEC Chairwoman Mary Schapiro said Tuesday in congressional testimony. The agency is studying the veracity of J.P. Morgan’s first-quarter reports, she said.
Mr. McLucas, a partner at law firm Wilmer Cutler Pickering Hale and Dorr, led the SEC’s enforcement division from 1989 to 1998. He represented board committees in the collapses of Enron and WorldCom.
Mr. McLucas didn’t reply to a phone call and e-mail seeking comment.
The losses occurred in a portfolio of credit investments at a London unit of J.P. Morgan’s chief investment office, which manages risks. The company used a trading strategy that was “flawed, complex, poorly conceived, poorly vetted and poorly executed,” CEO Jamie Dimon has said.
J.P. Morgan’s general counsel and most senior lawyer, Stephen Cutler, is also a former head of enforcement at the SEC and worked with Mr. McLucas at Wilmer from 2005 to 2007, before being hired by J.P. Morgan.