JPMorgan Chase & Co. (JPM:US)’s $2 billion loss at its chief investment office ranks among the biggest trading debacles.
The firm’s chief investment office, run by Ina Drew, 55, took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter or next, Chief Executive Officer Jamie Dimon told analysts yesterday. Losses mounted as New York-based JPMorgan tried to mitigate transactions designed to hedge credit exposure.
Following is a time-line of previous losses.
Company Year Detail JPMorgan 2012 $2 billion loss from positions in synthetic credit securities UBS 2011 $2.3 billion loss from unauthorized trading Credit Suisse 2008 Wrote down $2.65 billion over fourth quarter of 2007 and first quarter of 2008 after discovering debt securities mis-priced by employees Societe Generale 2008 Lost 4.9 billion euros ($6.3 billion) before taxes after trader went beyond permitted limits on European stock index futures Morgan Stanley 2007 Reported $9.4 billion of writedowns on U.S. subprime and other mortgage-related exposures established by a portfolio run by a proprietary-trading team Bank of Montreal 2007 Wrong-way bets on natural gas led to a pretax loss of about C$680 million ($676 million) Amaranth Advisors LLC 2006 Trader Brian Hunter’s bad bets on natural gas triggered $6.6 billion of losses Refco Inc. 2005 Declared bankruptcy after hiding $430 million of debt China Aviation Oil 2004 Lost $550 million on (Singapore) Corp. speculative oil-futures trades, forcing debt restructuring Allied Irish Banks Plc 2002 Trader hid $691 million in currency market losses Plains All American 1999 Lost $160 million because of Pipeline LP unauthorized crude-oil trading by an employee Long-Term Capital 1998 Lost $4 billion after a debt Management default by Russia Peregrine Investments 1998 Collapsed from at least Holdings Ltd. $300 million of debt bought from insolvent companies National Westminster 1997 Disclosed $125 million Bank Plc charge to cover options-trading loss Deutsche Morgan Grenfell 1996 Fired fund manager Peter Young for unauthorized trading and paid $279 million to bail out investors Sumitomo Corp. 1996 Disclosed a $2.6 billion loss on unauthorized copper trades by Yasuo Hamanaka Daiwa Bank 1995 Disclosed a $1.1 billion loss from unauthorized trades Barings Plc 1995 Collapsed after trader Nick Leeson racked up $1.4 billion in losses Orange County, 1994 Lost $1.7 billion from debt California and derivatives used to expand its investment fund Kidder Peabody & Co. 1994 Took a $210 million charge to reflect what it said were false bond trading profits by trader Joseph Jett Codelco 1994 Trader Juan Pablo Davila lost more than $200 million speculating on copper Metallgesellschaft AG 1993 Lost more than $1.5 billion trading oil futures contracts Drexel Burnham 1990 Filed for bankruptcy after Lambert Inc. pleading guilty to charges of insider trading and stock manipulation Merrill Lynch & Co. 1987 Mortgage trader accused of racking up $377 million loss in unauthorized trades
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