Zames, the head of JPMorgan’s global fixed income, will succeed Drew as head of the chief investment office, Reuters reports.
JPMorgan CEO Jamie Dimon announced the massive losses on Thursday, adding that the bank’s handling of synthetic credit securities was “flawed, complex, poorly reviewed, poorly executed and poorly monitored,” according to Bloomberg.
Drew is charged with mismanagement of securities tied to the creditworthiness of bonds, which ultimately sparked an investigation by regulatory authorities. The portfolio managed by Drew included hedging instruments that were too complex for a lean trading market.
Drew offered her resignation several times but it was not immediately accepted due to her performance history at the bank. Until the losses were revealed last week, Drew had a good reputation among industry colleagues, according to Reuters.
“It’s good to see there’s accountability as well as responsibility here,” David Hendler, an analyst at CreditSights Inc., said, Bloomberg reports. “This person was in charge of this strategy and it appears was not aware, or giving the right signals to top management, of the risks that were building.”
The bank first hired Zames in 2004 to run trading in options, treasuries, agencies and interest-rate swaps. In 2009, Zames and Daniel Pinto were chosen to run fixed income. Under the direction of the pair, JPMorgan has become the top-ranked bank globally in fixed-income trading.