JPMORGAN CHASE WHALE TRADES: A CASE HISTORY OF DERIVATIVES RISKS AND ABUSES

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Chase’s CIO is that to the Subcommittee's question, “Who was the Chief Risk Officer at CIO in
2011?” different bank managers, current and former, gave different answers.
While Mr. Weiland was the head of Market Risk at CIO, 897 many in the CIO were under
the impression that Mr. Weiland was, in fact, the CIO's Chief Risk Officer prior to the hiring of
Irvin Goldman in January 2012. Joseph Bonocore served as the Chief Financial Officer (CFO)
of CIO during Mr. Weiland's tenure before Mr. Wilmot took over and Mr. Bonocore became
JPMorgan Chase's Corporate Treasurer. 898 Mr. Bonocore was unambiguous that Mr. Weiland
served as the Chief Risk Officer for CIO, telling the Subcommittee, “I knew Pete as the CRO
during my time there.” 899 David Olson was the head of credit trading for the CIO’s Available for
Sale portfolio from 2006 until 2011 (which did not include synthetic credit derivatives). Mr.
Olson and Mr. Weiland had desks near each other on the CIO trading floor in New York, and
they spoke regularly. 900 Mr. Olson also told the Subcommittee that Mr. Weiland was the CIO’s
Chief Risk Officer. 901 Likewise, CIO’s head of Quantitative Analytics, Patrick Hagan, said that
he thought Mr. Weiland was the CIO’s Chief Risk Officer. 902 Even Mr. Weiland’s 2010
performance review, conducted by Ms. Drew, referred to him as the CIO’s CRO, though Ms.
Drew told the Subcommittee that this characterization was imprecise. 903
In other words, in late
2011, when CIO International began putting on the synthetic credit positions that would lead to
the $6 billion loss, the CIO Chief Risk Officer position was vacant; and the person that some at
CIO thought to be the Chief Risk Officer, was not, in fact, serving in that capacity.
In January 2012, the bank made several changes to its risk personnel. Mr. Zubrow
became the head of Corporate and Regulatory Affairs and John Hogan, who had previously
served as the Chief Risk Officer in the Investment Bank, took his place as the bankwide Chief
Risk Officer. 904 Mr. Hogan told the Subcommittee that, while he was appointed to the new
position in January 2012, he continued to serve as the Chief Risk Officer of the Investment Bank
through February. 905 Also in February, Ashley Bacon was appointed the bankwide Chief Market
Risk Officer reporting to Mr. Hogan. 906
With regard to the CIO, the risk management apparatus that Mr. Hogan inherited from
Mr. Zubrow was dysfunctional. The 2013 JPMorgan Chase Task Force Report found:
897
See, e.g., Subcommittee interview of Peter Weiland, CIO (8/29/2012); 2013 JPMorgan Chase Task Force Report,
at 20; undated (“Effective Pre-June 2011”) chart produced by JPMorgan Chase in response to a Subcommittee
request, “CIO Risk Management Team,” JPM-CIO-PSI-H 0002813; 1/30/2012 email from Irvin Goldman, CIO, to
Ashley Bacon, JPMorgan Chase, “CIO VaR heads up and update,” JPM-CIO-PSI 0020168 (“Pete as head of market
risk ….”).
898
Subcommittee interview of Joseph Bonocore, JPMorgan Chase (9/11/2012). Mr. Bonocore served as CFO for
CIO from September 2000 to November 2010, after which time he served as firmwide Corporate Treasurer until his
departure from JPMorgan Chase in October 2011 for personal reasons. Id.
899
Subcommittee interview of Joseph Bonocore, JPMorgan Chase (9/11/2012).
900
Subcommittee interview of David Olson, CIO (9/14/2012).
901
Id.
902
Subcommittee interview of Patrick Hagan, CIO (2/7/2013).
903
1/10/2011 email from Ina Drew, CIO, to Peter Weiland, CIO, “Confidential – 2010 Performance Evaluation”
JPM-CIO-PSI-H 0002801.
904
Subcommittee interview of John Hogan and Ashley Bacon, JPMorgan Chase (9/4/2012).
905
Id.
906
Id.