JPMorgan Executives Expected to Quit

Three top executives involved with a failed hedging strategy that cost JPMorgan Chase & Co at least $2 billion and tarnished its reputation are expected to leave the bank this week.

The bank – the biggest in the United States by assets – is expected to accept the resignation of Ina Drew, its New York-based chief investment officer and one of its highest-paid executives, in the next few days. Two of Drew’s subordinates who were involved with the trades, London-based Achilles Macris and Javier Martin-Artajo, are expected to be asked to leave, sources told Reuters.

The departures come after the unit Drew runs, known as the Chief Investment Office, mismanaged a large portfolio of derivatives tied to the creditworthiness of bonds, according to bank executives. The portfolio included layers of instruments used in hedging that became too complicated to work and too big to unwind quickly in the esoteric, thinly traded market.

Drew had repeatedly offered to resign in recent weeks, after the magnitude of the debacle became clear, according to one of the sources. But the resignation was not immediately accepted because of Drew’s past performance at the bank.

Until the loss was disclosed late on Thursday, Drew was considered one of the best managers of balance sheet risks. She earned more than $15 million in each of the last two years, Reuters reported.