The Volcker rule, a provision named for former Federal Reserve Chairman Paul Volcker in the 2010 Dodd-Frank bank reform legislation, could very well be used to scrutinize JPMorgan Chase & Co.’s $2-billion loss. The Washington Times Water Cooler blog asked Securities and Exchange Commission Chairman Mary Schapiro if the SEC would play any role in any federal investigations of JP Morgan regarding that loss.
“As you can imagine, regulators will be very focused on this,” she said. The Volcker rule was intended to curb speculative trading by banks and was scapegoated as the reason for the country’s economic downfall.
According to Bloomberg News, JP Morgan the loss happened after traders in the London-office altered a betting strategy. An executive told Bloomberg that JPMorgan Chief Executive Officer Jamie Dimon “wasn’t immediately told about their shift in strategy and didn’t know the magnitude of the losses until after the company reported earnings April 13.”
