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JPMorgan Still Too Risky for Investors?

JPMorgan may still be a risky investment, as long as certain risk management p

Following a string of disappointments from the banking giant JPMorgan Chase, one financial analysis website is recommending investors steer clear of the firm until it can get its risk management practices better sorted.

According to Seeking Alpha, JPMorgan's $2 billion losses from earlier in the year - which later climbed to nearly $6 billion and may still go higher - have actually contributed to $17 billion in market devaluation. The core issue, the site said, revolves around JPMorgan's risk management practices, which are very different from other similar institutions.

"Rather than allotting limits to individual traders, the risk management systems at JPMorgan allot trading limits to a group of traders," the source said. "This unorthodox risk management system allows traders like Bruno Iksil [who initiated the trade that lost $2 billion] to take large positions."

The source went on to note that, while the company has implemented some risk management overhauls, it has maintained the policies that allowed the risky trade in the first place.

According to, JPMorgan CEO Jamie Dimon has added several new members to the company's risk management team, including KPMG International Chairman Timothy Flynn, President of the American Museum of Natural History Ellen Futter, and Chief Executive Officer of Honeywell International David Cote.