JPMorgan makes another change in chief risk office
John Hogan, who was named chief risk officer at JPMorgan Chase last year just as its London Whale trades began racking up billions of dollars of losses, may leave the company, chief executive Jamie Dimon said on Thursday.
Hogan will hold a new title of chairman of risk after returning to work on Monday from a leave he started in January, Dimon said in a memo to employees which was seen by Reuters. Ashley Bacon, Hogan’s deputy, will become chief risk officer.
When Hogan became chief risk officer in January last year he inherited a dysfunctional risk management system, according to a report by the US Senate’s Permanent Subcommittee on Investigations. The report found that Hogan had no role in approving the bad trades and that he was unaware of their size and mounting losses before press reports about them in April of that year.
The company disclosed one month later that the trades had lost at least US$2 billion. The disclosure set off intense investigations by government and company officials of JPMorgan’s risk controls and whether some banks are too big to manage safely.
Hogan worked on overhauling the risk systems under the scrutiny of regulators. In November, Hogan’s father died after a long illness, according to a person close to the bank.
Hogan said in January that he had discussed the possibility of a leave with Dimon and other executives before deciding taking the action.
JPMorgan has lost, or reassigned, a number of top executives since the London Whale debacle, which ultimately cost more than US$6.2 billion. Since last May, Dimon has replaced his chief financial officer and investment banking chief, as well as the head of the Chief Investment Office, where the London Whale losses occurred.
Dimon said in the memo on Thursday that Hogan will work with Bacon for “several” months.
“We then hope he will stay at the firm in another senior role, but he may choose to do something different outside of our company,” Dimon said. “John is a highly talented executive who did a superb job as head of Risk when we needed him most.”