JPMorgan Chase is spinning out its “special investments group” from its scandal-hit chief investment office in a move to clean up the unit, which recently haemorrhaged $2bn in trading losses, the Financial Times reported on Thursday.
The division will be moved to the bank’s corporate arm and prevented from making future investments in a bid to refocus the unit on asset-liability management. Private equity and risky credit derivative investments have been banned, the report said.
The division made a number of private equity investments in companies including LightSquared, which has filed for bankruptcy protection, and Johnson Publishing. Norma Corio will continue to run the group, which is likely to be rebranded, the report added.
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