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

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principal bank subsidiaries are JPMorgan Chase Bank, N.A., a national bank with U.S. branches
in 23 states, and Chase Bank USA, N.A., a national bank specializing in credit cards. 15 The
firm’s principal non-bank subsidiary is JPMorgan Securities LLC. 16 The bank and non-bank
subsidiaries of the firm operate nationally as well as through overseas branches and subsidiaries,
representative offices, and subsidiary foreign banks. 17
The holding company’s activities are organized into six major lines of business or
business segments: (1) Retail Financial Services, (2) Card Services and Automobile Loans, (3)
Commercial Banking, (4) Investment Banking, (5) Treasury and Securities Services, and (6)
Asset Management. 18 In addition, JPMorgan Chase & Co. maintains an internal group called
“Corporate/Private Equity,” which houses its internal treasury function, a private equity group,
and the Chief Investment Office (CIO). 19 JPMorgan Chase has highlighted its focus on risk
management and often refers to its “fortress balance sheet.” 20
JPMorgan Chase is also the largest derivatives dealer in the United States, active in
derivatives markets involving commodities, credit instruments, equities, foreign currencies, and
interest rates. 21 Four U.S. banks dominate the U.S. derivatives markets, of which the credit
derivatives market is the third largest, representing about 6% of all derivatives activities. 22
JPMorgan Chase is the largest U.S. derivatives dealer in the credit markets. 23
James (Jamie) Dimon is Chairman of the Board of Directors and Chief Executive Officer
(CEO) of JPMorgan Chase & Co. 24 In his capacity as CEO of the holding company, Mr. Dimon
certifies the accuracy of required regulatory filings with the Securities and Exchange
Commission (SEC), such as the Company’s Forms 10-K and 10-Q. 25
14 “Primary Dealer List,” Federal Reserve Bank of New York,
http://www.newyorkfed.org/markets/pridealers_current.html.
15 5/10/2012 JPMorgan Form 10-Q, at 4.
16 Id.
17 Id.
18 Id. at 4-5.
19 Id. at 4; JPMorgan Chase & Co. 2011 annual report at 107 (hereinafter “2011 JPMorgan annual report”),
http://files.shareholder.com/downloads/ONE/2265496134x0x556139/75b4bd59-02e7-4495-a84c-
06e0b19d6990/JPMC_2011_annual_report_complete.pdf.
20 See, e.g., “Testimony of Jamie Dimon, Chairman & CEO, JPMorgan Chase & Co.,” before the U.S. Senate
Committee on Banking, Housing and Urban Affairs, (June 13, 2012), at 2,
http://files.shareholder.com/downloads/ONE/2156234165x0x577097/c0734566-d05f-4b7a-9fa4ec12a29fb2da/JPM_News_2012_6_13_Current.pdf;
see also 1/13/2012 “2011 Business Results,” JPMorgan Chase
& Co. press release, at 2, http://files.shareholder.com/downloads/ONE/2156234165x0x533390/4026b17b-89d6-
4ada-be00-9548c93ff325/4Q11_JPM_EPR_FINAL.pdf.
21 See “OCC’s Quarterly Report on Bank Trading and Derivatives Activity Second Quarter 2012,” Office of
Comptroller of Currency, at Tables 1-5 and Graph 3, http://www2.occ.gov/topics/capital-markets/financialmarkets/trading/derivatives/dq212.pdf.
22 Id. at 9, Graphs 3 and 4.
23 Id. at Tables 11 and 12.
24 Mr. Dimon became Chairman of the Board on December 31, 2006, and has been Chief Executive Officer since
December 31, 2005. See “Members of the Board,” JPMorgan Chase & Co.,
http://www.jpmorganchase.com/corporate/About-JPMC/board-of-directors.htm#dimon.
25 2/29/2012 “Form 10-K,” JPMorgan Chase & Co., at 342,
http://files.shareholder.com/downloads/ONE/2204603745x0xS19617-12-163/19617/filing.pdf; 11/8/2012, “Form