Risky Business for JPMorgan, Amazon Gets AC, Facebook Blame Game And More

Friday, May 25, 2012 JPMorgan Risk Committee Missing People With Experience Monitoring Risk Apparently running a museum is enough to qualify you to judge whether a bank's risk is too big. At least according to JPMorgan Chase. The committee responsible for overseeing risks at JPMorgan includes Ellen Futter, the head of the American Museum of Natural History, Bloomberg reports. Futter also sat on the governance committee of AIG in 2008 right before the firm's infamous collapse. Other committee members include the CEO of a defense contractor and a man who hasn't worked on Wall Street for 25 years. What the committee's missing that all the other big banks have: people who worked as financial risk managers. The makeup of JPMorgan's committee hasn't changed since 2008, but the bank was warned last year that it wasn't up to the task of monitoring the bank's risk. CtW Investment Group, a labor-backed shareholder group, sought to remove Futter and urged the bank to increase the committee's authority, according to Reuters. UPDATE: JPMorgan is planning on shaking up the members of its risk committee, the Wall Street Journal reports. The change was reportedly in the works before the bank disclosed a $2 billion trading loss on May 10. JPMorgan has come under fire in the wake of the loss that may have already cost the bank $30 billion, if the drop in its stock price is included. When JPMorgan CEO Jamie Dimon disclosed the loss earlier this month, he said it was the result of "egregious self-inflicted mistakes," adding that the bad trades were "poorly executed and poorly monitored." The bank's chief investment office, the group responsible for the trade, is developing a reputation for questionable risk management. It invested in financially troubled companies including LightSquared Inc., a wireless broadband provider that filed for bankruptcy earlier this month, the Wall Street Journal reports. In addition, Irvin Goldman, the man responsible for overseeing risk in JPMorgan's CIO, was fired by Cantor Fitzgerald in 2007 for making losing bets that resulted in sanctions from regulators, according to BusinessWeek. Ina Drew, the head of the CIO, retired earlier this month in the wake of the scandal. Still, despite the less-than-conservative risk strategy at his bank, many have praised Dimon for his risk management. Even after news of the loss broke, President Obama said that Dimon is "one of the smartest bankers we got." JPMorgan's whale fail and nine other big bank disasters: Romney To Pay More In Taxes? After Standoff With Occupy Group, Police Retreat From Foreclosed Home Amazon Pledges To Add AC To Warehouses Following Controversy Schneiderman: Mortgage Task Force Could Use 'More Resources' Flash Trading Blamed For Facebook IPO Glitches BLOG POSTS Jared Bernstein: Private Equity Firms: What Are They Good For? Private equity firms are not net job creators and they sure don't need the crazily huge distortionary tax break that they get. Sara Robinson: Capitalism Has Failed: 5 Bold Ways to Build a New World The old industrial-age systems -- state communism, fascism, free-market capitalism -- have all let us down hard, and growing numbers of us understand that going back there isn't an option. Don Tapscott: Living Out Loud -- Should We All Be More "Open?": Corporations, the Main Beneficiaries of Personal Sharing (Part 5 of 7) The most powerful forces making the case for sharing personal information are not philosophers or media pundits -- they are social media companies and other corporations who have a lot to gain from our social norms about privacy changing. Alan Grayson: Dumb Rich People Honestly, when you look at the facts, America's robber barons spending huge wads of cash to get rid of the Democrats are like lemmings. They're all jumping off the money cliff, and they're taking everyone else with them. Richard (RJ) Eskow: How to Fix the Fed: Dismiss Dimon, Boot the Bankers, and Can the Corporations The question isn't whether we need a central bank: We do. The question is, Why is it dominated by the people who have already ruined the economy once -- and who have a clear conflict of interest?

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