JPMorgan CEO Jamie Dimon questioned by Senate committee
BOSTON (AP) - U.S. Sen. Scott Brown urged JPMorgan Chase CEO Jamie Dimon on Wednesday to take back bonuses and incentive pay from those involved in risky trading that led to a $2 billion loss.
Brown's comments came as Dimon told Congress that senior bank executives responsible for a $2 billion trading loss will probably have some of their pay taken back by the company.
The Massachusetts Republican said that taking back the bonuses, including any money Dimon might have received, would demonstrate Dimon is serious about fixing the mistakes that led up to the loss.
"The only way to change the culture on Wall Street is to hit people where it hurts - in the wallet," Brown said in a statement. "Perhaps then the big banks will think twice about taking unnecessary risks that undermine public confidence in our financial system,"
Brown's Democratic challenger, Elizabeth Warren, has called on Dimon to resign from the Board of Directors of the New York Federal Reserve Bank.
Warren, who helped create the Consumer Financial Protection Bureau, also called on Congress to pass new rules to prevent banks from what she called "high-risk gambling."
"The giant banks that nearly broke our economy have cost millions of people their jobs, their homes, and their retirement savings, but those banks still haven't been held accountable," Warren said in statement Wednesday.
Dimon, testifying before the Senate Banking Committee, said there will likely be attempts to retrieve some of the bonuses and other incentives. He said that under bank policy, stock and bonuses can be recovered from executives, even for exercising bad judgment, but the policy has never been invoked.
Dimon, who came under scrutiny about his role in setting up the investment division of the bank responsible for the loss, also conceded that executives "made a mistake."
"I'm absolutely responsible," he said. "The buck stops with me."
Warren has seized on the $2 billion loss as she seeks to portray Brown as beholden to Wall Street.
Brown has relied heavily on donations from the financial services and health care sectors, while Warren, a Harvard Law professor, has tapped the wallets of lawyers, fellow academics, union members and filmmakers.
Brown has acknowledged taking donations from the financial sector but said the fact that he's supported some of the same initiatives Warren backed shows he's not in anyone's pocket.
Brown was among just three Republicans who voted for a sweeping overhaul of the nation's banking system, including the creation of the same Consumer Financial Protection Bureau that Warren championed.
But Democrats point out that Brown threatened to vote against the bill unless a proposed $19 billion fee on large banks and hedge funds was stripped out. The fee was later removed, and Brown backed the bill.
At the time, Brown said that he couldn't support "adding another $19 billion of pass-through taxes to individual consumers, especially in the middle of a two-year recession."
Massachusetts Democratic Party Chairman John Walsh said Brown's decision to call on Dimon to take back bonuses doesn't go far enough.
"The only way to change the culture on Wall Street is to fight for tough rules on big banks," Walsh said.
The race in one of the most closely watched - and expensive - Senate contests in the country. Campaign donations have already topped $30 million, with Election Day still five months away.