Will the JPMorgan Chase recent loss affects you?

By the time JPMorgan Chase discovered a loss has occurred at its London office on May 10, 2012, it has exceeded more than $2 billion. Its CEO has taken immediate action by removing the responsible parties from the bank.

At a hearing before the Senate Banking Committee on June 13, 2012, the CEO stated that some of the shareholders money will be lost but no client, customer or taxpayer money was impacted.

Since the news broke out in early April 2012, the JPMorgan shareholders lost approximately $39 billion of market value. At the end of March, it had $190 billion shareholder equity supporting $2.32 trillion assets.

JPMorgan also announced that it will suspend its previously announced $15 billion share repurchase program which was approved by the Federal regulators in March 2012. However, they will continue the payment of 30 cents a share quarterly dividend. Dividend payment will cost the bank over $1 billion. The suspension of the share buyback program will make money available to pay the dividend in spite of the massive derivatives related loss. Overall shareholders will be affected negatively due to the loss of value as well as the suspension of the share buyback program.