By DAN FITZPATRICK And JOANN S. LUBLIN
Barry Zubrow, a trusted lieutenant of J.P. Morgan Chase JPM -0.26% & Co. Chief Executive James Dimon, is expected to give up his job as regulatory affairs chief in what would be the latest reshuffling to follow a multibillion-dollar trading blunder.
The change is expected before year-end, said people close to the bank. It is possible the 59-year-old executive will remain with the company in an advisory role, these people added.
Bloomberg NewsJes Staley
Mr. Zubrow was chief risk officer from November 2007 to January 2012 and was a key member of Mr. Dimon’s team during the financial crisis. He couldn’t be reached for comment. A J.P. Morgan spokesman declined to comment.
More executive shifts also are possible. The chairman of the corporate and investment banking unit, Jes Staley, was recently in the running to become chief executive of British banking giantBarclays BARC.LN +2.38% PLC, according to people close to Mr. Staley, but didn’t get the job. He gave up day-to-day oversight of J.P. Morgan’s investment bank in a July reorganization. J.P. Morgan declined to comment about Mr. Staley, and he couldn’t be reached.
The prospect of additional movement at the top levels of J.P. Morgan underscores how much change is occurring at a bank that has been known for unity and continuity.
In the past three years, six executives have left Mr. Dimon’s operating committee—an elite group that currently has 15 members and represents all the firm’s key decision makers. Five new members have joined during that period.
Mr. Dimon has been the top executive at J.P. Morgan since late 2005, making him the longest-serving chief executive at one of the six largest U.S. banking companies. Mr. Dimon expects to remain in his role for several more years, people with knowledge of the situation have said. Board members have made it clear they want to see how younger executives perform in larger roles as they assess their potential for future leadership of the nation’s largest bank by assets.
The changes to J.P. Morgan’s inner circle come as the bank tries to convince investors that its trading mess is in the rearview mirror. In May, the bank told investors it faced billions of dollars in losses on a wrong-way derivatives trade placed by employees in a London office of the bank’s cash-management unit. A number of regulators and investigators, including the U.S. Senate Permanent Subcommittee on Investigations, still are probing the events surrounding the loss. The panel, led by Sen. Carl Levin (D., Mich.), has questioned Mr. Dimon, Ms. Drew and several others involved in the episode, said people with knowledge of the conversations. The panel hasn’t decided if it will hold hearings about the bad trades. J.P. Morgan has said additional losses could range between $800 million and $1.6 billion.
In July, J.P. Morgan elevated the two executives who mopped up the trading mess—Mike Cavanagh and Matt Zames—and both are now considered front runners for the top job, people with knowledge of the matter have said.
Some executives counseled Mr. Dimon to delay some of the executive moves he made in late July for fear that they might be perceived as a reaction to the trading fiasco. Mr. Dimon disagreed and pushed ahead with the long-planned changes.
Before those moves, Mr. Staley ran the investment bank day-to-day and was considered a potential successor to Mr. Dimon. But the reorganization stripped him of that power and elevated Mr. Cavanagh and Daniel Pinto as co-CEOs of a combined corporate and investment bank. Mr. Staley’s new job is chairman of that unit.
Not long after his reassignment, Mr. Staley emerged as a finalist for CEO of Barclays, which had been seeking a new leader who could resuscitate its battered reputation. He lost the race to longtime Barclays insider Antony Jenkins.
Mr. Staley took over as investment-bank chief executive in September 2009, after Mr. Dimon unexpectedly ousted longtime investment-bank co-chiefs Steve Black and Bill Winters.
The move came, in part, after the bank’s board decided that the company needed a clearer succession plan in case Mr. Dimon unexpectedly departed or was incapacitated.
On Mr. Staley’s watch the unit performed solidly, producing net income over $6.6 billion for each of 2009, 2010 and 2011. The investment bank advises on corporate strategy and structure, raises capital by selling stock and debt for clients and helps companies and institutions with risk management.
As was the case at rivals such as Morgan Stanley MS +0.17% and Goldman Sachs Group Inc., GS -0.49% business was squeezed by soft markets, uneven economic growth and tough new rules. The unit’s revenue fell 6.5% to $26.27 billion in 2011 from $28.11 billion in 2009.
For Mr. Zubrow, the July reorganization left him reporting to Mr. Zames instead of Mr. Dimon just six months after he took on a new role as head of corporate and regulatory affairs. Mr. Zubrow joined J.P. Morgan in 2007 from Goldman Sachs and was risk officer until January 2012. Mr. Dimon said in a Jan. 12 memo that Mr. Zubrow would maintain his position on all the firm’s risk committees and would be in charge of coordinating all regulatory relationships.
An advisory role is “not a nothing job” for Mr. Zubrow because he would counsel Mr. Dimon, and he “has a lot of value to add,” said one person familiar with the discussions. But he isn’t “in the right role now.”
Mr. Zubrow’s brother-in-law, Irvin Goldman, was named chief risk officer for the Chief Investment Office in late January and was removed from that position after the losses came to light. He left the company in July.
—Scott Patterson and Robin Sidel contributed to this article.