New York: JPMorgan Chase & Co is close to naming two new directors with finance and risk management expertise to its board, a source close to the matter said, as the largest US bank faces a new wave of regulatory scrutiny.
The bank has identified the candidates but the board has not yet voted on them, the source said on Tuesday, adding that a decision is likely to come in September. The names of the candidates could not be learned, although sources have said that Chairman and Chief Executive Jamie Dimon has extensive say in who is named to the board.
The new directors, who replace long-time board members David Cote and Ellen Futter, will join at a tense time for the bank.
JPMorgan has become the target of several new investigations, the most recent of which, according to a source familiar with the probe, is a preliminary inquiry by the US Department of Justice into whether the bank had manipulated energy markets.
JPMorgan’s board has been pressuring Dimon to improve the bank’s relationship with regulators, after a US Senate subcommittee report in March detailed how the executive demanded the bank withhold trading data from one of its regulators, and later yelled at a subordinate who provided the data.
The onslaught on the bank is a distraction for JPMorgan executives but is unlikely to let up until regulatory focus turned to another bank, the source said. Dimon, the source said, was “stoic” as he navigates the situation.
Another person who knows Dimon said the CEO dislikes having to spend so much time at management and board meetings discussing probes and settlements instead of regular business.
Dieter Waizenegger, executive director of the CtW Investment Group, which had campaigned this year against the re-election of Cote and Futter, said he hopes that new board members have experience in bank regulation so that they can help repair the company’s standing with the government and better guard against trading losses.
The so-called London Whale trades cost the bank more than $6 billion and have led to criminal charges against two of its former traders. Cote and Futter, who came under investor fire for failing to prevent the losses, resigned in July.
“The company got off on the wrong foot with regulators earlier this year, so someone who understands this would be helpful,” said Waizenegger, whose group is a JPMorgan shareholder.
