The sharks are circling JPMorgan Chase’s Chairman and CEO Jamie Dimon in the wake of the "London Whale," and all the bureaucrats who have felt the sting of his criticism of Dodd-Frank have their harpoons at the ready.
The London Whale, of course, is Bruno Iksil, a trader who worked for the London office of JPMorgan Chase and is held responsible for losses of up to $6.2 billion — an affair that has brought a Justice Dept. probe and a hearing before a Senate subcommittee chaired by Democrat Carl Levin.
It is an ironic turn of events for an iconic leader of U.S. banking who has built JPMorgan Chase into the largest and most profitable bank in America, a paragon of everything a 21st century financial institution should be. Dimon was named CEO of the Year by Institutional Investor Magazine just 18 short months ago.
Let me state at the outset that I am not impartial in this matter. I have known Jamie for more than 30 years as a mentor, a boss and a friend. He is a visionary CEO, an erudite and eloquent champion of our free market economy and a true titan of American finance, one of the few bankers whose name can be spoken in the same breath as Rockefeller, Morgan and Walter Wriston.
And he possesses an even rarer attribute that transcends all his achievements and accolades – he is a good man.
In the interest of full disclosure, I should also note that Jamie was one of a handful of investors who shared the vision and saw the potential of a little company called Lionsgate back in 1999, the company where I’ve served as vice-chairman for 13 years.
I am also a shareholder of JPMorgan, and if Jamie Dimon is forced to relinquish his chairmanship and resigns from the company, I will sell all my JPMorgan stock. And I am not alone.
Jamie has been on the right side of every crisis and controversy he has ever encountered. When the rest of the world abandoned failing banks as if they were lepers, Dimon orchestrated the bailout of Bear Stearns. If his peers had showed similar vision and courage, another great financial institution, Lehman Brothers, could possibly have been saved as well.
Under Dimon’s leadership, JPMorgan has invested in states from New Jersey to California and fledgling Eurozone economies when other financial institutions shrugged their shoulders or turned their heads. And during the London Whale crisis, Dimon manned up and took full responsibility, the appropriate parties were held accountable, and the board clawed back more than $100 million in stock.
London Whale was a chink in an otherwise formidable suit of armor. Most CEO’s would salivate at the prospect of making a mistake and still walking away with a record $21.3 billion profit – the largest in JPMorgan’s storied 200-year history and one of the biggest annual profits in the annals of American banking.
Dimon won back investor confidence – JPM stock closed just shy of $50 on Monday, up more than 50 percent since the London Whale revelations and near the company’s five-year high.
But the long knives have been out since he committed the heresy of breaking partisan ranks and becoming an outspoken critic of big government, excessive spending, and overregulation embodied in the misguided Dodd-Frank legislation, a classic example of a cure more draconian than the problem it was designed to correct.
And now the proxy advisory services have piled on in typical fashion.
Make no mistake – the crusade to strip Dimon of his chairman title has a political, not a financial or corporate governance agenda. Dimon’s critics aren’t about to let record profits, a surging stock price, and a quarter-century of leadership stand in their way.
There is ample precedent for a society turning on its heroes, and it’s never a pretty sight. The British people turned Winston Churchill out of office in 1945 after he led them to victory in World War II, and Americans have an equally frightening propensity for building our leaders up only to tear them down from the pedestals on which we put them.
But bad cultural habits are no excuse. JPMorgan’s board shouldn’t play the role of apologist for Jamie Dimon’s political detractors, and JPMorgan’s shareholders should do a true reckoning of Dimon’s assets and liabilities ahead of their fateful vote next week.
At a time when our economy is under siege by skeptics, idiots and ideologues alike, America’s financial community should cherish its heroes, not chastise them.
We should celebrate our globally competitive financial institutions, of which JPMorgan is the most illustrious and formidable, not strip them of the leadership that made them great.
To paraphrase former President Ronald Reagan, anyone who doesn’t recognize that our financial community still has heroes, even in this troubled and cynical era, isn’t looking in the right place, and Jamie Dimon at the helm of JPMorgan is foremost among them.
Michael Burns is vice-chairman of Lionsgate, one of the nation's leading entertainment companies.
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