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JPMorgan CFO Braunstein may step down

By Dan Wilchins

(Reuters) - JPMorgan Chase and Co's chief financial officer, Doug Braunstein, may step down and take another position with the bank, a person familiar with the matter told Reuters.

The move would be the latest management change at the bank, which has been roiled by $6 billion of losses from bad bets on derivatives.

The person familiar with the matter said Wednesday that any shift would be Braunstein's decision, and would be unrelated to the trades.

In July, JPMorgan announced new co-heads for commercial and investment banking and placed a co-chief operating officer in the reporting line between Braunstein and Chief Executive Jamie Dimon.

Dimon had testified a month earlier to a U.S. Senate committee that Braunstein was one of the people who had wrongly assured him in April that the derivatives losses were not a big deal.

Analysts believed the executive changes in July were designed to add checks and balances to the bank's senior ranks after the trading losses, which have brought intense regulatory scrutiny to the bank.

Dimon told Reuters at the time that the shifts had been in the works before the bad trades, and were designed to help the bank cope with the increased complexity that financial companies face globally.

Braunstein did not return a call to his cell phone seeking comment on his possible job change, and the bank declined to comment. The timing for any job change for Braunstein is unclear.

The bank is set to report third-quarter earnings on Friday.

The $6 billion of trading losses came from a JPMorgan group called the Chief Investment Office (CIO), which managed risk for the bank and invested deposits. The CIO group in London took large bets on derivatives, with one trader taking big enough positions to be called "the London Whale."

The bank first disclosed possible losses in May, and in July said that some traders may have lied about the value of their positions to the bank, adding fuel to government probes into the trades.

Regulators and agencies including the U.S. Federal Bureau of Investigation (FBI), the U.S. Securities and Exchange Commission (SEC), and the Federal Reserve Bank of New York are all looking at the bank.

On Wednesday, Dimon told an audience at the Council on Foreign Relations in Washington, "We made a stupid error.

He added: "I should have caught it ... I didn't."

Even with the trading losses, JPMorgan Chase earned $5 billion in the second quarter.

In narrative accounts of the bad trades by multiple media outlets, including a more-than-7,000 word piece published in this weekend's New York Times Magazine, Braunstein is not mentioned.

JPMorgan said last week in an internal memo that Barry Zubrow was retiring. Zubrow was head of risk management at the bank when it was building a dangerously large position in credit derivatives.

In January, months before the bank announced the bad derivatives trades, Zubrow switched to heading corporate and regulatory affairs.

News of Braunstein's possible job switch was earlier reported by the Wall Street Journal.

(Additional reporting by Sarah N. Lynch in Washington and David Henry in New York; Editing by Bernadette Baum)

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