SEARCH

Entries in Loss (8)

Thursday
Jun282012

Report: JPMorgan Chase Trading Loss Could Rise to $9 Billion

Peter Foley/Bloomberg via Getty Images(NEW YORK) -- Trading losses at JPMorgan Chase may be much bigger than previously thought.

Citing people familiar with the matter, The New York Times reports the bank's losses may have ballooned to as much as $9 billion.  Previous reports had the estimate at $2 billion and counting.

The sources tell the newspaper "the red ink has been mounting in recent weeks, as the bank has been unwinding its positions."

In May, JPMorgan traced its loss to losing bets on "synthetic credit securities" -- the same kind of instruments that nearly led to a collapse of the financial system in 2008, prompting a nearly $1 trillion government bailout.

The mishandled trade has added to the debate over bank regulations, and whether some "too big to fail firms" are making very risky trades.

Copyright 2012 ABC News Radio

Tuesday
May152012

JPMorgan Execs to Hear from Shareholders Following $2B Loss

STAN HONDA/AFP/Getty Images(TAMPA, Fla.) -- JPMorgan Chase executives are likely to get an earful from shareholders on Tuesday when they convene in Tampa, Fla.

The bank's $2 billion in-house trading operating loss is expected to be a hot topic at the annual shareholders meeting.  JPMorgan's stock price has dropped dramatically since it reported the loss last week.

Despite the huge loss, Aaron Tasker with Yahoo Financial says the firm is still very strong.

"Two billion dollars is a lot of money.  But for JPMorgan, it's 0.1 percent of their assets.  I mean the bank is gigantic, it's huge, it's very strong," he says.

But Tasker adds that recent history makes investors nervous.

"You remember in the summer of 2007 Bear Stearns announced it had some big losses in two of its hedge funds.  And people said ok that's a problem, but nobody thought Bear Stearns was gonna go out of business over that.  So again it's that little nagging voice in the back of your head that says this is probably nothing but it could be something," he says.

Copyright 2012 ABC News Radio

Monday
May142012

JPMorgan Execs Behind $2 Billion Trading Loss Expected to Resign

STAN HONDA/AFP/Getty ImagesUPDATE: Ina Drew, the chief investment officer at JPMorgan Chase, "has made the decision to retire from the firm," the company announced on Monday.

In a statement, JPMorgan said Drew will be succeeded by Matt Zanes, the current co-head of Global Fixed Income in the Investment Bank and head of Capital Markets within the Mortgage Bank.

(NEW YORK) -- In the wake of JPMorgan Chase’s $2.3 billion in-house trading operating loss, at least three people tied to the risky trades are expected to resign.

Ina Drew, chief investment officer at JPMorgan, will be one of the executives leaving, according to the Wall Street Journal.  Drew, 55, is one of the top women on Wall Street and for the past seven years had been the trading division head at the bank.

Drew has offered to resign since the disclosure of the firm’s loss, which could top $4 billion.

On Thursday, JPMorgan Chase’s CEO Jamie Dimon admitted the trading loss was an "egregious" failure in a unit managing risks, but he added that just because the bank did something "stupid" doesn't mean other firms are having such trouble.

"There were many errors, sloppiness and bad judgment," Dimon said.  "These were grievous mistakes, they were self-inflicted."

The loss reportedly came within the last six weeks and resulted from losing bets on "synthetic credit securities" -- the same kind of instruments that nearly led to a collapse of the financial system in 2008, prompting a nearly $1 trillion government bailout.

Congress and the FDIC have been grappling with how to prevent "too big to fail" institutions from taking big risks knowing that the U.S. Treasury is there to back them up.

According to the Wall Street Journal, the Securities and Exchange Commission has started an early stage review into the loss.

video platform video management video solutions video player

Copyright 2012 ABC News Radio

Friday
May112012

JPMorgan Trading Loss Roils Markets, Raises Fears About Bank Risks

STAN HONDA/AFP/Getty Images(NEW YORK) -- JP Morgan Chase & Co. is rocking the financial markets with the disclosure that its in-house trading operating lost $2 billion in the past six weeks, raising new questions about whether the big banks that caused the financial meltdown have sufficiently changed their ways.

Chief Executive Officer Jamie Dimon said the trading loss was an "egregious" failure in a unit managing risks, but he added in a call with analysts after the markets closed Thursday that just because the bank did something "stupid" that doesn't mean other firms are having such trouble.

"There were many errors, sloppiness and bad judgment," Dimon said.  "These were grievous mistakes, they were self-inflicted."

Congress and the FDIC have been grappling with how to prevent "too big to fail" institutions from taking big risks knowing that the U.S. Treasury is there to back them up.

JPMorgan, the largest U.S. bank, traced its big loss to the firm's chief investment office, run by Ina Drew.  His unit made losing bets on "synthetic credit securities" -- the same kind of instruments that nearly led to a collapse of the financial system in 2008, prompting a nearly $1 trillion government bailout.

Global markets fell on Friday after the big surprise trading loss at JPMorgan Chase shook investor confidence, while political chaos in Greece continued to cast uncertainty over its future in the euro currency bloc.

JPMorgan stock plunged almost 7 percent in after-hours trading, and the unexpected loss at one of the world's most venerated banks undermined investor confidence.  British banks were hit hard -- Barclays, which has a large investment banking arm, was the biggest loser in London trading, down 2.9 percent by midmorning.

In Europe, the FTSE 100 index of leading British shares dropped 0.3 percent at 5,525, while Germany's DAX fell 0.3 percent too to 6,498.  The CAC-40 in France was 0.7 percent lower at 3,107.

The euro was up 0.2 percent at $1.2952, though still near four-month lows against the dollar.

Wall Street headed for a lower opening on Friday, with both Dow futures and S&P 500 futures down 0.5 percent.

Copyright 2012 ABC News Radio

Tuesday
Apr102012

Sony Bumps Up Projected Annual Net Loss to Record $6.4B

AFP/AFP/Getty Images(TOKYO) -- Sony revised its forecast for its 2011 fiscal year on Tuesday, projecting a record annual net loss of 520 billion yen, or $6.4 billion.

That's more than double the 220 billion yen the Japanese electronics giant had estimated in February.

In a statement, the company said it "expects to record an aggregate additional charge of approximately 300 billion yen in tax expense in the fourth quarter of the fiscal year ended March 31, 2012, primarily due to the establishment of valuation allowances against certain deferred tax assets, predominantly in the U.S."

[CLICK HERE TO SEE THE FULL STATEMENT]

The announcement comes a day after Japanese news reports said Sony would be cutting 10,000 jobs worldwide, or about 6 percent of its workforce, in an effort to restructure the company.

Sony has not confirmed the layoffs, but its new CEO, Kazuo Hirai, is expected to hold a press conference on Thursday to discuss the company's new business plan.

Copyright 2012 ABC News Radio

Thursday
Feb022012

Sony Reports Net Loss of Over $2 Billion in Third Quarter

AFP/AFP/Getty Images(TOKYO) -- Sony's new CEO will have his work cut out for him when he takes over later this year.

The Japanese electronics and entertainment giant on Thursday said it suffered a net loss of over $2 billion in its third quarter, keeping Sony in the red for the fourth straight year.  The shortfall was a result of the floods in Thailand, which shut down two of Sony's factories, and a strong yen, which eroded the company's earnings abroad.

And the picture doesn't look much better for the rest of Sony's fiscal year. The company predicts a net loss of close to $3 billion -- up from its previous forecast of roughly $1.2 billion.

Sony hopes Kazuo Hirai will be able to turn the company around when he replaces CEO Howard Stringer in April.  Hirai, known for his work in Sony's gaming division, was announced as the new head of the company on Wednesday.

Copyright 2012 ABC News Radio

Thursday
Sep152011

Did Single Trader Cost UBS $2 Billion? Arrest Made in London

SEBASTIAN DERUNGS/AFP/Getty Images(LONDON) -- A 31-year-old man has been arrested in connection to UBS' announcement that a single trader may have cost the bank an estimated $2 billion.

The man, who has not been identified, was detained in London Thursday morning.

That same day, the Swiss bank said in a statement that "unauthorized trading by a trader in its Investment Bank" resulted in the 10-figure loss.

UBS noted that the amount lost could change since the matter was still under investigation, and warned that the deficit could lead it to report a loss when its third quarter figures come out for the year.

The bank did not offer any further details but said that "no client positions were affected."

Copyright 2011 ABC News Radio

Saturday
Apr302011

Berkshire Hathaway Expects Decline in First-Quarter Profits

Jemal Countess/Getty Images for Time Inc.(OMAHA, Neb.) -- In his address at the Berkshire Hathaway Annual Shareholders meeting on Saturday, investor and philanthropist Warren Buffett is expected to inform shareholders that the company’s estimated 2011 first-quarter profits have decreased significantly when compared to profits from the previous year.

According to a press release from the company, Berkshire Hathaway expects to report about $1.5 billion in net earnings for the first three months of 2011, down from the $3.6 billion posted for the same period in 2010. One factor which led to the decline in expected profits is an estimated $1.07 billion in losses incurred as a result of the Japan earthquake in March. Buffet, who is the chairman and Chief Executive Officer of Berkshire Hathaway, is also expected to inform shareholders about significant losses caused by an earthquake in New Zealand and flooding in Australia earlier in the year.

Copyright 2011 ABC News Radio







ABC News Radio