Contender rises in JP Morgan's top ranks
Zames named sole chief operating officer after helping clean up US$6.2b London mess
JP Morgan Chase, the biggest bank in the United States, named Matt Zames sole chief operating officer as Frank Bisignano left to become the chief executive of First Data Corp.
"Zames is expanding his role," JP Morgan chairman and chief executive Jamie Dimon said in an internal memorandum.
Paul Compton, a co-chief administrative officer of the corporate and investment bank, will become the chief administrative officer and report to Zames, according to the notice.
Bisignano's exit buttresses Zames' stature as a potential successor to Dimon, 57. Zames, 42, was promoted twice within 100 days last year as he helped Dimon regain control of a British unit's wayward bets on credit derivatives that cost the bank more than US$6.2 billion.
Zames, who began last year as co-head of the fixed-income business, was named chief investment officer in May and co-chief operating officer in July.
Bisignano, 53, was due to begin his new job yesterday, said Chip Swearngan, a spokesman for First Data, the largest merchant acquirer in the US, helping retailers accept credit and debit-card payments.
Technology and security were among Bisignano's responsibilities as co-chief operating officer, and he held executive roles within the payments industry earlier in his career.
Lou Rauchenberger, who was co-chief administrative officer of JP Morgan's corporate and investment bank with Compton, remains as the lone chief administrative officer of that unit.
The loss at the firm's chief investment office was the focus of a probe by the US Senate Permanent Subcommittee on Investigations. The panel said JP Morgan dodged regulators and misled investors as losses swelled on a bet by trader Bruno Iksil, who was dubbed the London Whale because of the size of his position. Managers manipulated risk models and pressured traders to overvalue their positions to hide mounting losses, according to the committee's report.
In January, the Federal Reserve and Office of the Comptroller of the Currency censured JP Morgan over failures in risk controls for the derivatives trades as well as for lapses in anti-money laundering controls.
The Whale trades preceded other departures, starting with chief investment officer Ina Drew's exit within a week of the initial disclosure of the loss. James Staley quit in January to join BlueMountain Capital Management, the hedge-fund firm that profited from the bank's trading loss.