A top senior executive in the inner circle of JPMorgan Chase’s chief executive Jamie Dimon is leaving the nation’s largest bank, the latest chapter in the management turmoil that has ensued after the bank’s multibillion-dollar trading loss.
The executive, Frank Bisignano, the co-chief operating officer, is expected to leave as early as this week, according to several people with knowledge of his decision, continuing a steady drumbeat of senior managers to leave in the aftermath of the trading losses. Those losses have swelled to more than $6.2 billion since first disclosed almost a year ago.
A spokeswoman for JPMorgan Chase declined to comment.
With Mr. Bisignano’s departure, the inner circle of executives who once surrounded Mr. Dimon as he helped steer the bank through the 2008 financial crisis is even thinner. Several other executives have already left, including Heidi Miller, James E. Staley, Bill Winters or Steve Black.
As part of a broad management reshuffling in July, Mr. Bisignano was promoted to co-chief operating officer, a role he shared with Matt Zames. During his time at JPMorgan, Mr. Bisignano gained a reputation as a kind of Mr. Fix-It. His reputation had not been tarnished by the outsized bets made by traders in JPMorgan’s chief investment office.
He took the reins of JPMorgan’s floundering mortgage unit in 2011 just as the bank was grappling with thorny legal issues, including investors that accused the bank of selling shaky mortgage backed securities that later imploded. To rout out problems, Mr. Bisignano revamped the staff of the mortgage unit and unveiled a policy to address instances where JPMorgan had wrongfully foreclosed on active-duty military members, a violation of federal law. He was a skilled manager at the bank and kept a tight watch over the mortgage operations.
Mr. Bisignano will leave at a challenging time for JPMorgan, which used to hold special sway with federal regulators, in part because the bank largely sidestepped the wreckage of the financial crisis.
Now JPMorgan is facing a criminal inquiry about whether it misled investors and regulators about the botched trades. Besides that inquiry, JPMorgan is dealing with investigations by at least eight federal agencies, including the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission and the Securities and Exchange Commission, according to the people with direct knowledge of the matter. Prosecutors are examining a range of issues including possible breakdowns in anti-money laundering controls.
Mr. Bisignano’s exit comes as the bank works to bolster its risk and compliance controls while repairing frayed relationships with the bank’s regulators in Washington. The breakdown between JPMorgan and its primary regulator was illuminated during a Senate hearing and report by the Senate’s Permanent Subcommittee on Investigations that painted a picture of a bank that sometimes took a defiant position with regulators.
To account for the trading losses, Mr. Dimon has testified before Congress and repeatedly apologized for the mistakes.
In his annual letter to shareholders earlier this month, Mr. Dimon continued to take a contrite tone. He voted to continue bolstering risk controls at the bank, expressing regret again that the bank “let our regulators down.â€
Mr. Dimon promised to redouble efforts to fix compliance problems by deploying resources to further fortify controls. “We are reprioritizing our major projects and initiatives,†he said.
