Dimon Blasts Short Sellers

JP Morgan Chase CEO Jamie Dimon said yesterday that U.S. regulators should investigate short sellers who bet on Bear Stearn’s stock falling, expressing the belief their activity intentionally brought down the investment bank, according to The New York Times.

Trading volumes in Bear shares dramatically increased days before the buyout of what was once the fifth-largest U.S. investment bank. Rumors spread that short sellers were betting on a fall in Bear Stearns’ share price and ultimately fueled its near collapse.

In an interview with Charlie Rose on PBS, which aired Monday, Dimon argued that the Securities and Exchange Commission should conduct an investigation. “Where there is smoke, there’s fire,” he said, “I think the Securities and Exchange Commission should investigate it, okay? I think if someone knowingly starts a rumor or passes on a rumor, they should go to jail.

“This is even worse than insider trading. This is deliberate and malicious destruction of value and people’s lives,” Dimon told the NYT. “They shouldn’t go to jail for a short period of time. If I was the SEC., I’d find out who made the money and I’d investigate like they do when they come after us all the time, emails, phone records, you name it, and I’d find out.”

Dimon also said that JPMorgan is about 75 percent finished integrating Bear Stearns into its own firm. Dimon also said that Bear Stearn’s risk-weighted assets—totaling $220 billion—have been reduced by almost half and that the most difficult part of the transition is behind them.