Description: Time-tested wisdom on Wall Street is that when a trade you made is losing money, you should swallow hard and get out of the position before things get even worse. Cut your losses. But when JPMorgan Chase (JPM) started losing big on its London Whale trade last year, traders and executives all the way up to the chief executive officer seemingly had trouble facing the painful reality.

Source: Businessweek.com

Date: Mar 15, 2013

Link: http://www.businessweek.com/articles/2013-03-15/how-big-losses-distorted-jpmorgans-sense-of-reality#r=hpt-ls

Questions for Discussions:

• Summarize the analysis of what went wrong and why,  as presented in this report.
• What message is there for financial managers?