Since the end of March, the company's Chief Investment Office "has had significant mark-to-market losses in its synthetic credit portfolio," the company said in a filing late on Thursday.
Chief Executive Jamie Dimon called the mistakes "egregious" and apologized to stock analysts on a conference call that the company suddenly scheduled after making the disclosure in a quarterly filing to the U.S. Securities and Exchange Commission.
Dimon acknowledged that the errors are especially embarrassing in light of his public criticism of the so-called Volcker rule to ban proprietary trading by big banks.
"It plays right into the hands of a bunch of pundits out there, but that is life," Dimon said. He said he still believes in his arguments against the Volcker rule. The problem at JPMorgan, he said, was with the execution of the hedging strategy.
The strategy "morphed over time" and it was "ineffective, poorly monitored, poorly constructed and all of that," Dimon said.
"This violated our principles. This trading violates the Dimon principle."
Apparently the Dimon Principle is "if you lose big enough at Big Casino, the house will pay you back anyway." We'll see how markets react today to this one. I'm betting it's going to be a very bad Friday on Wall Street. But remember, we can't have the Volcker Rule because our super smart titans of Wall Street wouldn't be able to make any money. You know, instead of losing billions and making you pay for it, that's perfectly okay.
Sorry about crashing your economy and all, but DIMON PRINCIPLE, that's why.
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