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Ina Drew Goes Down

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By her early fifties, she was really running with the big dogs.

Ina R. Drew. She was an inspiration for business women for almost 20 years, and now her remarkable history has turned cautionary.

As chief investment officer at J.P. Morgan Chase & Co., she was praised for a stellar performance in 2008 when other banks were suffering disastrous losses. Highly regarded by CEO Jamie Dimon , she earned about $13 million per year managing the bank’s investments. By her early fifties, she was really running with the big dogs. And then everything began to change.

The descent probably began with illness, since she was reportedly diagnosed with Lyme Disease in 2010. The symptoms are extreme fatigue, joint swelling and pain, headaches, and inability to concentrate. She was often on medical leave, unable closely to supervise competitive and ambitious traders within a culture dedicated to maximizing profits.

Ms. Drew’s frequent absences may have resulted in a critical loss of discipline. Rivalries apparently intensified, and aggressive traders made inordinate bets on extremely complicated trades in derivatives that were difficult to exit when market conditions deteriorated.

When word surfaced that Ms. Drew’s unit was responsible for a $2 billion loss, she resigned. Now the size of the loss has risen to $5 billion-plus and may go as high as $7 billion.

The newspapers reported that Ms. Drew volunteered (one must wonder) to give back about $30 million in compensation. There will also be a “clawback” of two years of compensation from each of the three traders most responsible for the loss. They too have left the bank.

There is a question here of oversight, of course, and when Jamie Dimon was recently asked by an investment analyst whether the bank had become too big ($3 trillion in assets) to be managed efficiently, he denied it. Amid all the news about corruption, greed, and incompetence in the overblown financial industry, that question has begun to hover. A bank that is too big to fail may be just too big.

There is a possibility that his board of directors will also penalize Mr. Dimon financially for this loss, but I expect that is unlikely. Humiliating, you know. In fact, this is the first time that executives have ever been publicly identified as having compensation confiscated. Actually, I think it’s a very good idea, something that should become more common practice. I just think it’s interesting that the precedent should have been set with a woman.

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