Another Wall Street head bites the dust. This morning, JP Morgan Chase announced that its Chief Investment Officer, one of the highest ranking women in Wall Street, Ina Drew will be retiring following news that she oversaw a $2 billion loss. The 30 year veteran earned nearly $16 million last year and was one of the highest ranking and paid women in the financial industry.
Last Thursday, the financial industry shook – and we shook our heads with it – when the company’s CEO Jamie Dimon revealed that the sector of the company in charge of avoiding the type of loss that lead to the financial crisis of 2008 actually dropped the recent ball, contributing to the current crisis.
Today, some are praising Dimon for quickly disclosing the loss and asking if his upfront and candid approach is a sign to come for other Wall Street companies.
Could this be the direct result of the Occupy Movement? There has been much talk about the Occupy Movement having little to no utility since its inception in 2011. There are quite a few protests, some violent and some not, but there’s been little voting or political bit behind the bark. One thing is for sure: the focus on shifting blame to Wall Street bankers for the Great Recession did do a lot to shape how America thought about its financial state.
It also might be a win for those who support increased government regulation.
Former Wall Street regulator Michael Greenberger told CBS News that Drew made mistakes because she was able to make moves without regulation like the highly controversial Dodd-Frank bill which would’ve prevented the trades that Dimon made.
“These kinds of transactions are as complex as they are risky. And it’s very difficult for anybody really to understand what’s going on. I think (in) the end (it will be) shown the trader himself didn’t understand what was going on,” Greenberger said. “These traders are given enormous discretion without proper supervision or Understanding, and you end up with these enormous losses…[t]his kind of trade would have been banned” under a fully-implemented Dodd-Frank.
The Occupy Movement could be credited for forcing the general public to start being more critical of the financial industry. With that sentiment widespread, Wall Street is not getting a pass on this run, especially after being bailed out with taxpayer funds.
The increased pressure got the Obama Administration to launch a working group, the Financial Fraud Enforcement Task Force, to investigate the role Wall Street played in the housing crisis with an eye towards possibly filing charges.
And in January 2012, the FBI filed charges against 7 people in an expanding insider trading investigation involving some of Wall Street’s most prominent money managers.
Drew is not the only recent Wall Street or business world casualty. Just this week, we witnessed the forced resignation of the 4th Yahoo! CEO in 5 years after its current CEO Scott Thompson was forced out amidst revelations that he fudged his academic credentials.
A turn in the tide? We’ll see. It could just be a ripple in the puddle.