A decade after Sanford “Sandy” Weill stepped down as Citigroup Inc.’s chief executive officer amid a cascade of regulatory investigations and lawsuits, JPMorgan Chase & Co. CEO Jamie Dimon’s legal expenses are surpassing those of his one-time mentor.
Facing probes into mortgage bonds, energy trading and hiring practices in Asia, JPMorgan took a $7.2 billion charge on Oct. 11 for expenses tied to regulatory matters and litigation, bringing the total the bank has set aside or spent since the start of 2010 to $28 billion. Weill’s tenure at Citigroup ended up leaving the bank with at least $5.5 billion in legal costs, then the most in history for a Wall Street firm.
Dimon’s reputation, burnished by more than $100 billion in profits and the rescue of failing lenders Bear Stearns Cos. and Washington Mutual Inc., has so far endured a $6.2 billion trading loss and accusations that the firm manipulated U.S. power markets. Until his departure, Weill’s image also seemed to be immune to a series of scandals, according to Peter Henning, a law professor at Wayne State University in Detroit.
“Sandy Weill was the great architect who revived the American banking system and made it a global leader again,” Henning said. “And then all of a sudden it changes.”
The jump in legal expenses forced Dimon last week to report the bank’s only quarterly loss on his watch.
