JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon sought to hide escalating trading losses that surpassed $6.2 billion by misleading investors and dodging regulators as the bank's position deteriorated last year, a Senate probe found.
When you hedge you should not lose money as the losses on your book are offset by profits elsewhere on your book. so it is very clear that when you lose $6.2 billion you must have been speculating and this is clearly what JP Morgan was doing. Things get worse in the senate report which concludes that JPMorgan had:
“a trading operation that piled on risk, ignored limits on risk taking, hid losses, dodged oversight and misinformed the public,”
Seems to me that there really needs to be risk management controls in these banks, if you can rack up $6.2 billion of losses and think you are hedging then really something is SERIOUSLY WRONG ! Originally Jamie Dimon stated the losses would be limited and a "tempest in a teapot." Thanks a lot for that deep insight Jamie.