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JPMorgan Suffers a Big Loss

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JPMorgan Chase (NYSE: JPM  ) co-chief operating officer Frank Bisignano has left the building.

Bisignano was one of CEO Jamie Dimon's hand-picked, top-level managers, and a potential successor for Dimon himself. JPMorgan has seen plenty of management changes of late, and the superbank -- as well as its investors -- really don't need to see anymore. Is this a sign of things to come?

Empty-nest syndrome?
According to a statement from the bank, Bisignano left to become CEO of First Data Corp, a global payments processor. The same statement also announced that Matt Zames, JPMorgan's other co-chief operating office, will now take on the role of chief operating officer by himself. 

Dimon had the usual nice things to say top executives say about other top executives when they leave a company: we'll miss him, we wish him all the best, etc. And according to Financial Times, Bisignano left "because he wanted to run a company for himself." 

Foolish bottom line
Zames and Bisignano became co-chief operating officers in in the wake of last year's London Whale trading scandal, as Dimon purged the bank of top management he didn't feel were up to newly evolving snuff. Bisignano, characterized by Financial Times as Dimon's "enforcer and fix-it man," is known for having revamped JPMorgan's mortgage-servicing platform. 

Zames should be perfectly capable of filling the role of chief operating officer all by himself. Dimon is famously fond of him and a full believer in his capabilities, once referring to him as someone "you want to be in a foxhole with." So there's no problem for JPMorgan there.

And Bisignano was rumored to be part of the possible line of succession for CEO. But so is Zames, as well as Dimon's other hand-picked people: Mike Cavanagh, co-head of corporate and investment banking, and Mary Erdoes, head of asset management. So it's not like JPMorgan will be wanting for Dimon-approved CEO candidates when the time comes.

But it was a tough 2012 for JPMorgan. The London Whale scandal did serious damage to Dimon's reputation as a risk manager (though I believe he's still the best in banking). And Dimon's purge was an aggressive attempt to fill top management with people he knows and trusts implicitly, and people he feels can take up the reigns of CEO when he decides to retire.

This is a delicate time for Dimon. He's still facing a proxy vote to split the roles of CEO and COB, positions he now holds himself -- this too as a result of the $6 billion London Whale trading loss.

Goldman Sachs (NYSE: GS  ) CEO Lloyd Blankfein just narrowly avoided having to face a similar vote, at least in part because the activist shareholder group behind the proxy move -- CtW Investment Group -- wanted to focus its considerable energies on splitting the roles at JPMorgan. JPMorgan shareholders don't need to see anyone at the top jumping ship, a possibly poor reflection on Dimon himself.

Bisignano's departure seems smooth and rancor free, and more details may yet emerge, but I hope this isn't a first sign that Dimon's post-purge managers will be leaving the JPMorgan building. The bank -- and its investors -- don't need any more dramatic exits. 

Looking for in-depth analysis on JPMorgan?
Check out a new Motley Fool report on the superbank, written by Ilan Moscovitz -- The Motley Fool's senior banking analyst and JPMorgan Chase specialist. You'll learn where the key opportunities for the superbank lie, where its core growth will come from, and the potential business risks. You'll also get an analysis of its leadership team. For immediate access click here now.

Read/Post Comments (4) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 29, 2013, at 10:46 PM, justpicky01 wrote:

    cry me a river

  • Report this Comment On April 29, 2013, at 10:52 PM, quasimodo007 wrote:

    being the top richest financier in the USA and one of the head Mobsters of the New american mafia of Bank barons along with Goldman Sachs that control the USA Treasury. GREED and corruption and THE GREAT American RIP OFF is their TRUE MOTTO on the POOR American TAX Payers

  • Report this Comment On April 30, 2013, at 5:11 AM, crash3085 wrote:

    Would anyone miss JPMorgan if they were to just sort of fade away? Didn't think so...

  • Report this Comment On April 30, 2013, at 6:48 AM, Sunshine7days13 wrote:

    A bad day for Chase, is a great day for America! Dimon is the great Jacob Marley of our era! He thinks there will be a special Park Ave. condo waiting for him in heaven for all the good deeds he has performed here on earth.

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