UPDATE: JPMorgan's Restatement Will Reduce Firm's Reported Net Income for 2012 Q1 by $459M

No Effect on Net Income for the Six-Month Period Ended June 30, 2012 JPMorgan Chase & Co.

today reported that it will restate its previously-filed interim financial statements for the first quarter of 2012. The restatement will have no effect on total earnings or revenues for the company year-to-date. The restatement announced today will reduce the firm's previously-reported net income for the 2012 first quarter by $459 million. The restatement relates to valuations of certain positions in the synthetic credit portfolio in the firm's Chief Investment Office (CIO). More specifically, traders in CIO were expected to mark their positions where they would expect to be able to execute in the market. In this instance, while the positions were within thresholds established by an independent valuation control group within CIO, the firm has recently discovered information that raises questions about the integrity of the trader marks and suggests that certain individuals may have been seeking to avoid showing the full amount of the losses in the portfolio during the first quarter. As a result, we are no longer confident that the trader marks reflected good faith estimates of fair value at quarter end and we decided to remark the positions utilizing external “mid-market” benchmarks, adjusted for liquidity considerations. While there are a range of acceptable values for such positions, we believe our approach represents an objective valuation and is a reasonable approach under the circumstances. Management reached the determination to restate on July 12, 2012, and reviewed the matter with the Audit Committee of the Firm's Board of Directors on the same day. Our previously filed financial statements for the 2012 first quarter should no longer be relied upon. We expect to file restated financial statements for the first quarter as soon as practical but no later than when we file our financial statements for the second quarter.