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JPMorgan bet against itself in 'Whale' trade

Jan 30 2013 Emily Flitter, Reuters

There is a new twist in the London Whale trading scandal that cost JPMorgan Chase $6.2 billion in trading losses last year. Some of the firm's own traders bet against the very derivatives positions placed by its chief investment office, said three people familiar with the matter. The U.S. Senate Permanent Committee on Investigations, which launched an inquiry into the trading loss last fall, is looking into how different divisions of the bank wound up on opposite sides of the same trade, said one of the people familiar with the matter. It is not uncommon for large banks to hold opposing positions in the same market. Still, the revelation that the bank was taking two sides on the same trade also is likely to rekindle the debate about whether banks such as JPMorgan Chase are too big to manage and should be scaled back. The committee is expected to release a report on its investigation in the next few weeks. The people familiar with the situation did not comment on the dollar value

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