A decade after Sanford 'Sandy' Weill stepped down as Citigroup's CEO amid a cascade of regulatory investigations and lawsuits, JPMorgan CEO Jamie Dimon’s legal expenses are surpassing those of his one-time mentor.
Bloomberg reports that facing probes into mortgage bonds, energy trading and hiring practices in Asia, JPMorgan took a $7.2bn charge on 11th October for expenses tied to regulatory matters and litigation, bringing the total the bank has set aside or spent since the start of 2010 to $28bn.
Weill’s tenure at Citigroup ended up leaving the bank with at least $5.5bn in legal costs, then the most in history for a Wall Street firm.
Dimon’s reputation, burnished by more than $100bn in profits and the rescue of failing lenders Bear Stearns and Washington Mutual, has so far endured a $6.2bn trading loss and accusations the firm manipulated U.S. power markets. Until his departure, Weill’s image also seemed to be immune to a series of scandals, according to Peter Henning, a law professor at Wayne State University in Detroit.
'Sandy Weill was the great architect who revived the American banking system and made it a global leader again', Henning said. 'And then all of a sudden it changes'.
The jump in legal expenses forced Dimon last week to report the bank’s only quarterly loss on his watch. The third-quarter deficit amounted to $380m, compared with a profit of $5.7bn a year earlier. The last time New York-based JPMorgan failed to report a profit was the second quarter of 2004, when William Harrison was CEO.
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image: © David Shankbone