JPMorgan audit director admits bank mistakes
The head of JPMorgan Chase's audit committee acknowledged on Thursday that the bank had made mistakes and said it has tried to learn from them.
"We've got these things that we actually are guilty of and we've got to fix them," said Laban Jackson, the head of the audit committee of JPMorgan's board of directors.
"It's embarrassing for the board," he added. Jackson spoke at a conference at a downtown Chicago hotel on Thursday.
The remarks could underscore the bank's eagerness to resolve the raft of regulatory investigations it now faces. Earlier on Thursday, JPMorgan Chief Executive Jamie Dimon met with U.S. Attorney General Eric Holder in Washington to discuss a settlement to end investigations into its sales of shoddy mortgage securities leading up to the financial crisis.
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In Chicago, Jackson spoke publicly with Anne Sheehan, chair of the Council of Institutional Investors, which sponsored the event.
Jackson did not discuss in detail the bank's settlement talks with regulators.
But he did offer a picture of some board decision making and vowed that it would try to become more open with investors. When Sheehan, as moderator, suggested that many directors would not share the same goal, Jackson replied, "That's got to change, and you guys have to drive it."
Asked what he learned from JPMorgan's troubles, Jackson said that while few boards or managers could stop malfeasance, JPMorgan made sure its response to problems like the so-called "London whale" trading losses were correct, such as by bringing in law firms to investigate its actions.
Jackson quoted JPMorgan's top director, former Exxon Mobil CEO Lee Raymond, as saying: "our job is to get the respect back in the market."
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Jackson received a polite reception from attendees at the conference, which included hundreds of officials from state pension funds, endowments and other institutions.
Several said, however, they wished the directors had taken a harder line. "I think he was very light on the board's self-evaluation," said Dieter Waizenegger, executive director of CtW Investment Group, an advisor to union pension funds. CtW previously had opposed Jackson's re-election to the board.
Jackson noted that after problems emerged, JPMorgan had clawed back millions of dollars from executives, demoted some and fired others to send a strong message that the bank's rules and culture had to be respected.
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"I don't know what else we could have done because we're not allowed to shoot people," Jackson said. "That's what happened. I'm sorry to all you shareholders."