J.P. Morgan Restated 1Q Cites 'Material Weakness'

Date : 08/09/2012 @ 9:30AM
Source : Dow Jones News
Stock : JP Morgan Chase & Co. (JPM)
Quote : 87.0  -0.61 (-0.70%) @ 7:41PM

J.P. Morgan Restated 1Q Cites 'Material Weakness'

JP Morgan Chase (NYSE:JPM)
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J.P.Morgan Chase & Co. (JPM) on Thursday admitted to a "material weakness" in the bank's internal controls in filing its restated first-quarter results, which included the loss resulting from ill-placed investment hedges.

The company's restated first-quarter profit of $4.92 billion, down $459 million from the original report, matched what the company announced last month.

In a filing with the Securities and Exchange Commission, J.P.Morgan said it "determined that a material weakness existed in the firm's internal control over financial reporting as of March 31, 2012." The bank reiterated that remedies had been taken but that "management's internal review" of the matter is ongoing.

The nation's largest bank by assets had to restate its first-quarter report because losses from its synthetic credit portfolio disclosed earlier this year had unexpectedly impacted results in the quarter.

When it reported second-quarter earnings last month, J.P.Morgan Chase had said the losses tied to trades known as the London Whale had amounted to $5.8 billion as of July, but that not all the losses were booked in the second-quarter. J.P.Morgan's second-quarter profit was $4.96 billion.

The bank reiterated Thursday that it detected some employees had tried to hide the losses in the first-quarter, and that it therefore had to restate results.

Write to Matthias Rieker at matthias.rieker@dowjones.com

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