One of America’s most notorious oil executives has been selected by JPMorgan to lead the internal inquiry into the $6 billion (£3.8 billion) of trading losses run up by the so-called “London Whale”.
Lee Raymond, a 73-year old who led Exxon from 1993 to 2005 will have the final say on the probe and will rule on whether JP chief executive Jamie Dimon handled the situation properly.
Raymond could impose various punishments on Dimon, including cutting his pay. He got $23 million in 2011. Although Raymond is regarded as a friend and mentor to Dimon he is also said to be fearlessly independent.
Raymond is best known for receiving an extraordinary retirement package worth $400 million. That deal emerged in 2006, one year after Exxon made the biggest profit of any company at $36 billion.
JPMorgan, until recently seen as one of the few major banks to have escaped the financial crisis relatively free of scandal, has been on the back foot ever since it emerged that one of its traders, Bruno Iksil, had taken huge bets on credit derivatives that were seriously misjudged.
The losses on the portfolio at the London-based Chief Investment Office have more than doubled from the $2 billion initially estimated.
According to the Wall Street Journal the panel will check the previous findings of management and will interview company employees where necessary. It will report back later this year.
