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

II. BACKGROUND
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This section provides background information on JPMorgan Chase, its Chief Investment
Office, the Office of the Comptroller of the Currency, capital requirements for banks, and credit
derivatives.
A. JPMorgan Chase & Company
JPMorgan Chase & Co. (“JPMorgan Chase”) is a leading global financial services firm
incorporated under Delaware law and headquartered in New York City. 7 On the New York
Stock Exchange (NYSE), it is listed under the ticker symbol “JPM” and is a component of the
Dow Jones Industrial Average. 8 In addition to being the largest financial holding company in the
United States, the firm conducts operations in more than 60 countries, employs more than
240,000 people, maintains 5,500 bank branches, and as of December 31, 2012, has more than $2
trillion in assets. 9
The JPMorgan Chase & Co. of today began as JPMorgan, a commercial bank, in the 19 th
century. 10 Subsequently, it grew into a complex, diversified firm through a series of acquisitions
and mergers that have included Chase Manhattan, a commercial bank; Bear Stearns, an
investment bank; and the banking operations of Washington Mutual, a thrift institution. 11 In
January 2013, JPMorgan Chase & Co. reported a 2012 record net income of $21.3 billion, on
revenue of $99.9 billion. 12
JPMorgan Chase & Co. engages in a wide variety of financial services, including
banking, mortgage lending, securities, credit card issuance, commodities trading, and asset
management. 13 It also serves as a primary dealer in U.S. government securities. 14
The firm’s
7
1/9/2013 Form 8-K, JPMorgan Chase & Co., at 1, (hereinafter “1/9/2013 JPMorgan Form 8-K”),
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=8650849; see also “Financial Highlights,” JPMorgan
Chase & Co., http://files.shareholder.com/downloads/ONE/2156230184x0x556141/09bf5025-eea2-413d-a0af-
96820dd964f6/JPMC_2011_annual_report_finhighlights.pdf.
8
“JPMorgan Chase & Co.,” New York Stock Exchange, http://www.nyse.com/about/listed/jpm.html.
9
JPMorgan is the largest bank holding company by asset size. See “Top 50 Holding Companies (HCs) as of
9/30/2012,” Federal Reserve System, National Information Center,
http://www.ffiec.gov/nicpubweb/nicweb/Top50Form.aspx; 2/28/2013 Form 10-K (Annual Report), JPMorgan Chase
& Co., at 1, http://files.shareholder.com/downloads/ONE/2275559219x0xS19617-13-221/19617/filing.pdf; see
“About Us,” JPMorgan Chase & Co., http://www.jpmorganchase.com/corporate/About-JPMC/about-us.htm; see
also “Financial Highlights,” JPMorgan Chase & Co.,
http://files.shareholder.com/downloads/ONE/2156230184x0x556141/09bf5025-eea2-413d-a0af-
96820dd964f6/JPMC_2011_annual_report_finhighlights.pdf.
10
See “The History of JPMorgan Chase & Co.,” JPMorgan Chase & Co.,
http://www.jpmorganchase.com/corporate/About-JPMC/document/shorthistory.pdf.
11
See “History of Our Firm,” JPMorgan Chase & Co., http://www.jpmorganchase.com/corporate/About-
JPMC/jpmorgan-history.htm.
12
1/16/2013 JPMorgan Chase & Co. press release, “JPMorgan Chase Reports Fourth-Quarter 2012 Net Income of
$5.7 Billion, or $1.39 Per Share, on Revenue of $24.4 Billion,” at 1,
http://files.shareholder.com/downloads/ONE/2275559219x0x628669/0de76d99-815a-4a63-b14dc9f41ed930a3/JPM_News_2013_1_16_Current.pdf.
13
5/10/2012 JPMorgan Form 10-Q, at 4-5.