Two traders at JP Morgan were sacked earlier this year over compliance issues, according to reports.
Andrew Lombara, head of US treasury trading and Chi Lee, a junior treasury trader, both left JP Morgan in January this year. No reasons were given at the time for their departure.
Reports circulating have now suggested the pair were dismissed over disagreements on the amount of reserves taken for treasury trades.
The two traders were hoping to increase the size of reserve and did so without consulting the firm’s valuation committee.
JP Morgan viewed this as a violation of its internal procedures, and Lee and Lombara were dismissed from their positions.
JP Morgan’s filing about the dismissals to the Financial Industry Regulatory Authority (FINRA) on each employee said: “The firm determined that the employee did not adhere to certain control processes.”
JP Morgan declined to comment on the revelations, but FINRA told reporters: “As with other terminations like theirs, FINRA is in the process of reviewing the reason for the termination.”
The dismissals occurred during the same period JP Morgan announced an 11% decline in fixed income revenues, due to increased regulatory pressures.
Fixed income revenues have steadily declined across investment banks, as business intelligence provider, Coalition, reported FICC revenues have declined 39% over the last 5 years across the top global banks.
Lombara had been with JP Morgan for 10 years, and previously held a similar position at HSBC securities in the US.
Similarly, Lee worked at HSBC before joining JP Morgan in 2006. Both traders are not currently linked to any other bank.