Jamie Dimon passes shareholder vote on JP Morgan role

The FBI and the US Department of Justice are examining whether there was any criminal wrongdoing in losses that have damaged the reputation that JP Morgan and Mr Dimon have built for risk management.

America's largest bank by assets has been battling to contain the fallout from the losses, which Mr Dimon described as "self-inflicted".

Yesterday, at the bank's annual shareholder meeting in Tampa, Florida, the banker admitted: "It should never have happened. I can't justify it."

The 56 year-old, one of the most powerful bankers on Wall Street, said he would consider clawing back the bonuses of any executives found to be responsible.

The losses have already cost Ina Drew, the head of the bank's chief investment office, her job and more are expected to leave the bank.

Mr Dimon yesterday refused to say how long its own internal investigation will take, but said the bank would "do the right thing".

In a further blow to Mr Dimon, whom President Barack Obama once described as his "favourite banker", 40pc of JP Morgan's shareholders voted to split his dual role as chairman and chief executive.

The crisis is the biggest that Mr Dimon has faced since shepherding JP Morgan through the financial crisis. Just a month ago, he dismissed reports about large trades the bank was making in an obscure corner of the derivatives market as nothing more than a "tempest in a teapot". Yesterday, he promised shareholders that "we will do the right thing" in investigating the losses.

But there was little sign of the controversy abating yesterday. John Liu, who runs New York City's pension fund, yesterday joined the call for bonuses of those executives responsible for the losses to be taken back.

The disclosure of the losses in the credit derivatives market has reignited the debate in the US over whether more regulation is needed to ensure the safety and soundness of the financial system.

Mr Dimon has been one of the most outspoken critics of the wave of regulation since the financial crisis, but insisted to shareholders that he was in favour of "sound and strong" regulation.

JP Morgan, which employs thousands of people in the City of London, has warned that the $2bn losses could deepen over the course of the year.

While some shareholders at the Florida AGM offered support to Mr Dimon, others were alarmed and baffled at the scale of the losses that the bank said it ran up in six weeks. "I'd like to have a clearer sense of the risk that I'm taking when I invest in JP Morgan," said Eric Vlahov, a shareholder. "Right now you don't."

Although the proposal to appoint an independent chairman failed to win the support of the majority of shareholders, the size of the vote in favour may have surprised the bank's board.

Most votes are likely to have been submitted before the trading losses were disclosed last Thursday. However, 91.5pc of shareholders backed the pay of Mr Dimon, which totalled $23m last year.

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JP Morgan's Jamie Dimon finds it's less stormy in the south

The bank's Highland Oaks Campus maybe just 20 miles outside Tampa but it felt much further from the storm that has engulfed the bank's chairman and chief executive Jamie Dimon at his Park Avenue headquarters in Manhattan over the last five days.

The bank, though, had clearly prepared for the storm to follow it south. There was a pen for protesters outside the entrance. Shareholders driving up were met by a small army of security staff and assorted JPMorgan staff manned with lists, clipboards and iPhones. Once inside, it was obvious JPMorgan had not planned for this to be an all-day event.

Those shareholders that made the trip needed to have eaten before they arrived. The sandwiches and drinks that lure pensioners to AGMs up and down Britain, were absent. The only refreshment - at least that this correspondent could see - was a water fountain. The desire to wrap up proceedings quickly was strengthened as Dimon opened the meeting by talking about "what is probably on your minds after reading the newspapers over the last few days."

Known for speaking quickly, the 56-year old moved up a gear as phrases like "embedded gains" "chief investment office" and "our original intent" were all showered on the audience of about 200 people in the first couple of minutes. Any shareholders, meanwhile, who wanted to take the floor were limited to three minutes.

Fears that JPMorgan may have harboured that the meeting could take a disorderly turn were misplaced. The egg that Dimon said last week had been left on the bank's face in the wake of the trades did not turn into anything more physical. Not that shareholders ignored the loss that has wiped almost $20bn from JPMorgan's market value in the last five days.

Father Seamus Finn of the Interfaith Centre on Corporate Responsibility asked Dimon whether the losses would change his well-known opposition to the Volcker Rule, which bans banks from gambling with their own money. Dimon insisted he was in favour of strong and simple regulation but "didn't want to bore the whole crowd" with the minutaie of the regulation. Most shareholders looked relieved.

The real flashes of investor anger were not sparked by JPMorgan's backfiring bets, but from its role in the US mortgage market. Why, one woman implored, won't the bank make modifications to some of its mortgages to keep people in their homes? JPMorgan was one of five banks that earlier this year signed up to a $25bn agreement with authorities to settle allegations that lenders had abused procedures used to repossess homes.

The mortgage questions were also a reminder of the sheer scale of activities of JPMorgan, which has grown bigger since the financial crisis. Dimon said that he did not believe that the trading losses would not stop the bank's ambition to keep raising its dividend. There were many who had made the trip to Tampa with stronger reason to agree.

"I live on my dividends. I'm 81," said Robert Van Winkle who had come from neighbouring Bel Air. It was not raucous, but the meeting kept its punch till the last minute when it was disclosed that 40.1pc of shareholders had voted for an independent chairman. Van Winkle was a firm supporter of Dimon, but the vote suggests that there are plenty of shareholders questioning whether the bank really is doing its best to look after the dividends that are so valuable to many.

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