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WASHINGTON -- Federal regulators are reviewing what JPMorgan Chasetold investors about its finances and the risks it took weeksbefore suffering a multibillion-dollar trading loss. Mary Schapiro , chairman of the Securities and Exchange Commission, told the Senate Banking Committee Tuesday that the agency is examining JPMorgan's earningsstatements and first-quarter financial reports to determine if theywere "accurate and truthful." Schapiro and Gary Gensler , chairman of the Commodity Futures Trading Commission , said the $2 billion-plus loss at JPMorgan should be a lesson forregulators to tighten rules mandated under the 2010 financialoverhaul. "It would be wrong for us not to take this example," Schapiro said.JPMorgan is the biggest U.S. bank by assets and the only major U.S. bank to stay profitable duringthe 2008 financial crisis. Most Republican lawmakers voted against the financial overhaul.They say it won't prevent another financial crisis. And the worrythat it will drive business overseas. Sen. Richard Shelby , the ranking Republican on the panel, questioned why Schapiro andGensler weren't aware of what was happening at JPMorgan. "So you really didn't know what was going on .. until you read thepress reports" in April? Shelby asked them. The trading loss was disclosed May 10 by JPMorgan CEO Jamie Dimon in a hastily convened conference call with investors andjournalists. In April, Dimon had dismissed concerns about thebank's trading as a "tempest in a teapot" -- a characterization herecently acknowledged he had been "dead wrong" to make. Two more hearings are scheduled before the Senate panel in thecoming weeks. Officials from the Federal Reserve and the Treasury Department will testify on June 6. Dimon has agreed to testify at the third hearing, which has yet tobe scheduled. Dimon has said the loss came from trading in credit derivativesthat was designed to hedge against financial risk, not to make aprofit for the bank. Gensler said the CFTC is investigating JPMorgan's ill-timed bet oncomplex financial instruments that led to the trading loss. Under the financial overhaul, the CFTC gained powers to monitortrading in indexes of derivatives. JPMorgan invested heavily in anindex of insurance-like products that protect against default bybond issuers. Hedge funds were betting that the index would losevalue, forcing JPMorgan to sell investments at a loss. Schapiro and Gensler said they were hopeful that a key part of theoverhaul could prevent the type of loss that occurred at JPMorgan. The so-called Volcker Rule would prevent banks from trading for their own profit. The idea isto protect depositors' money, which is insured by the government.Regulators are finalizing the rule, which is scheduled to takeeffect in July. But banks will have until July 2014 to meet therequirements of the rule. Dimon has been among the most vocal critics of the rule. The bigWall Street banks won an exemption in the rule: It would let themmake such trades to hedge not only the risks of individualinvestments but also the risks of a broader investment portfolio. Gensler acknowledged that the various federal regulators working onthe rule, from a half-dozen agencies, don't agree on how strict itshould be. "We will ultimately have differences," he said. The e-commerce company in China offers quality products such as Automatic Carton Machine Manufacturer , China Semi Automatic Machines, and more. For more , please visit Carton Packing today!
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