No, this isn't Dimon's stand to retain his dual roles of CEO and COB. We all know that stand has already been firmly taken and decisively won. But this other stand by the JPMorgan Chase (JPM 0.49%) chief involves something equally important to the health and welfare of the bank, if not more so.
We shall fight them in the courtrooms
At the Morgan Stanley Financials Conference on Tuesday, Dimon reportedly vowed to fight any lawsuits filed over last year's London Whale trading debacle: the botched derivatives trades that cost the superbank more than $6 billion to wind up.
According to Financial Times, he pledged to "fight to the end," adding: "There was no hiding, there was no lying, there was no bullshitting. Period." Paraphrased by the FT, Dimon also said: "There was no attempt to mislead investors by him or then chief financial officer, Doug Braunstein."
Foolish bottom line
Dimon then went on to again apologize for the London Whale incident, in the direct, no-holds-barred fashion I remember seeing when the story first broke: "I don't know what more I can say. Bad strategy, badly vetted, badly monitored, badly controlled. Embarrassing. Terrible. Sorry."
And what else can he do or say at this point? What else do investors want? Dimon delivered record net income for the first quarter of 2013, and the bank's third year in a row of record income. So throughout the entirety of the London Whale loss, the bank remained not just profitable, but record-profitable. He also guided JPMorgan through the financial crisis arguably better than any other CEO, and the bank's "fortress balance sheet" is a marvel to behold.
Several months after the London Whale affair came to light, Dimon said his goal was to have no one talking about it in 2013. Well, that's not the case. And there must be lawsuits in the pipeline, or at the very least stirrings of them, or Dimon likely would not have even broached the subject; Financial Times had nothing specific to say about it.
JPMorgan should fight any Whale-related lawsuits to the bitter end. If there was some hesitation in announcing to the world that the bank was on the bad end of massive derivatives bets going awry, it would have been mad to blurt it out without putting some thought into how the bank was going to handle and ultimately get out of them. To do anything else would have been irresponsible to shareholders, who might have been on the end of an even bigger loss had JPMorgan not handled this situation as carefully and skillfully as it did.
As a shareholder in any company, the first thing I want top management to think about when facing an unknown and potentially existential situation is to take care of the business: to keep the company safely intact and on track. By doing this, the company is taking care of me as a shareholder, as well.
Shareholders rightly and unanimously backed Dimon on his vitally important stand to stay on as chairman. They ought to back him on this vitally important stand, too.
