J.P. Morgan Chase & Co. CEO Jamie Dimon told U.S. House members that he complied with disclosure rules in warning investors about changes that contributed to the bank’s trading loss of at least $2 billion.
“We disclosed what we knew when we knew it,” Mr. Dimon told lawmakers Tuesday at a House Financial Services Committee hearing in Washington that lasted more than four hours.
It was Mr. Dimon’s second appearance on Capitol Hill in less than a week to explain how the firm lost control of its derivatives trades.
Securities and Exchange Commission Chairwoman Mary Schapiro, speaking from the same witness table earlier, said the agency has a “wide panoply” of penalties at its disposal in pursuing sanctions against J.P. Morgan. The bank could pay penalties if investigators find that it violated disclosure or other rules, she said.
Since Mr. Dimon announced the loss on May 10, investors and regulators have questioned J.P. Morgan’s disclosures of changes to its “value at risk” calculation. Mr. Dimon told investors on May 10 that the company used a new model, which later proved to be “inadequate,” to calculate VaR some time during the first quarter.
He told lawmakers Tuesday the model change didn’t directly cause the loss. “It may have aggravated what happened,” Mr. Dimon said. “I wouldn’t say it was the cause of what happened.”
Mr. Dimon also has warned that the $2 billion loss could balloon as the bank unravels some of its troubled trades. He told lawmakers he won’t provide an update on the loss until the bank releases its second-quarter earnings on July 13.
