The Type Of Arrogance That Cost JP Morgan $7 Billion

gweezycapital.com

5 points·NickGweezy··6 comments

> It makes you wonder how these people get hired.

They must have forgotten to ask "Will you eventually lose our company billions of dollars in a bad derivatives trade?" in their interview process. It's easy to place blame on hiring someone after something like this happens, but would you have made the same criticism before the trade, when he had made the company lots of money? Interviews are imperfect. People change after you hire them. Etc etc.

Edit: clarification

From http://www.bloomberg.com/news/2012-05-21/jpmorgan-cio-risk-c... : """ Irvin Goldman, who oversaw risk in the JPMorgan Chase & Co. unit that suffered more than $2 billion in trading losses, was fired by another Wall Street firm in 2007 for money-losing bets that prompted a regulatory sanction at the firm, Cantor Fitzgerald LP, three people with direct knowledge of the matter said. """

Apparently, this guy had a history, no change was needed.

While I was referring to the trader who actually made the bet, that is pretty troubling. Somewhat surprising for a firm (previously) considered to be relatively risk-averse.

THAT is disturbing. They hired this guy after a horrible history of trading. It's nepotism.

lol.. you must've never worked with or for a fund. they're called black bags for a reason.

Very true. But I have also heard that there are no women on that options trading team. Furthermore, you NEVER make a bet without hedging it. This was a foolish trade that stemmed from a feeling of omnipotence.

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