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Why No Changes on JPMorgan's Board Post-Whale?

By Jonathan Weil
January 15, 2013 5:04 PM EST

Fortune writer Stephen Gandel has an article on the CNNMoney website this afternoon pointing out (disapprovingly) that, "Despite criticism, the 'London Whale' trading loss has yet to result in a single change to JPMorgan Chase and Co.'s board of directors." He asks why that is.

Let me try to answer the question in as practical a way as I can, by pointing to JPMorgan's stock price.  At $46.35, it's up 25 percent since May 11, which was the first day of trading after JPMorgan belatedly began to fess up to its Whale problem. The thing about rising stock prices is they have a funny way of defusing shareholders' anger, never mind how egregious the breakdown in JPMorgan's internal controls may have been. And shareholders are the ones who vote on board members.

JPMorgan reports fourth-quarter earnings tomorrow, when it also is expected to release an internal report on the $6 billion trading loss. One hopes the company will use this opportunity to come clean and put the London Whale scandal to rest for good.

(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)

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