Fired, then rebounded to become CFO of banking giant JPMorgan Chase, Invest News & Top Stories

(BLOOMBERG) – Resume isn’t quite what you would expect for someone about to handle the finances of the powerful JPMorgan Chase. Long before Mr Jeremy Barnum was promoted to CFO, he was fired for a business incident – by JPMorgan. He then separated from hedge fund BlueMountain Capital Management due to another market error.

But then his second act began. JPMorgan lured him in 2007 with a vague mandate to help him with his credit operations – from freewheeling roles and big bets to the nuts and bolts of the operation. Soon after, Mr. Daniel Pinto, now Jamie Dimon’s first mate, took a liking to Mr. Barnum, aiding his rise.

A lot of people are bouncing back, but Mr Barnum’s rise to CFO of the banking giant is an unlikely Wall Street story. He helped the pioneers of credit derivatives, was thrown out of trading roles in buy and sell companies, refocused on risk management, and gained benefactors in the highest echelons of JPMorgan.

“Most people on Wall Street have some form of career setback in their lives, and recovering from it is what makes them better at their jobs,” said Troy Rohrbaugh, head of global markets at JPMorgan.

Parts of Mr. Barnum’s resume read like many others in the halls of power on Wall Street: Born in New York, he attended elite boarding school in Groton, Massachusetts, then Harvard.

But before going to Groton, Mr Barnum, 48, spent his youth in a bohemian neighborhood of Barcelona with his mother pianist, learning Spanish and Catalan, and listening to an array of economic debates that included anarcho -unionism.

“You get to know him a little bit and he’s just different from all the other people at Groton and Harvard,” said Mr. Gus Christensen, a former banker who left Wall Street for politics. They have been friends since joining the bank in 1994, when Mr Barnum, armed with a chemistry degree, showed up in a second-hand Brooks Brothers suit.

Mr Christensen and others noted that Mr Barnum’s time abroad had left him speaking differently from his peers. “He speaks like a movie actor in the 1930s – he’s got a bit of a locking jaw. It’s not an English way of speaking that I had heard from anyone else in my generation.”

After half a decade of managing FX options and emerging market derivatives, Barnum joined the Credit Derivatives team in 1999, where he was able to put his prowess in mathematics and engineering to good use. structuring. This has placed him at the heart of a rapidly changing market – and within JPMorgan itself.

The company pioneered credit default swaps, contracts that work like insurance to reimburse investors if a borrower does not pay. It was also in the midst of mergers and acquisitions that would culminate in 2004 with its merger with Mr. Dimon’s Bank One Corp.

That year, JPMorgan’s fixed income results weakened. When Mr Barnum’s team lost a package, his name was added to a layoff list as the bank undertook to restructure the unit. He sent his colleagues an ironic farewell email recommending that they study closely the career of Josef Stalin’s henchman Lavrentiy Beria and get really good at PowerPoint.

Mr Barnum was quickly snapped up by BlueMountain, which appointed him to head its London office in 2005. The following year the fund took a dip in counter-credit betting linked to Liberty’s Cablecom. Global, which earned him another foreclosure. In a statement at the time, a senior BlueMountain executive said his exit was “by mutual agreement.”

Then came the strange turnaround. JPMorgan gave him a second chance and a new mission: instead of making bets himself, he would use his trading experience and the lessons he had learned to help oversee businesses, spot risks and avoid problems. . In 2007, he joined JPMorgan, just as two of Bear Stearns’ hedge funds exploded.

In 2010, he was indispensable to his bosses and on the rise, having helped the firm dodge the bullets of the financial crisis. Two years later he became CFO of the Global Markets division and, the following year, was elevated to CFO of all corporate and investment banking.

He also helped clean up one of Mr Dimon’s biggest headaches – the so-called London Whale trade scandal, in which a group that was supposed to oversee the bank’s excess liquidity lost billions of dollars on botched credit default swap bets. JPMorgan’s antagonist in the debacle turned out to be BlueMountain, Mr Barnum’s former employer. The lender ended up relying on the hedge fund to help resolve the positions and fix the problem.

Mr. Pinto, who oversees the company’s investment banking, was appointed to become the sole president and chief operating officer at the end of the year. And, in the same announcement, Mr. Dimon elevated Mr. Barnum to CFO.

Some are eager to see how Barnum interacts with analysts and investors. He is known to enjoy good debate and is rarely at a loss for words.

“He’s the kind of guy, you would sit at a table and talk about Russian politics in 1913, and he would know even more about it than you,” said Mr. Shahraab Ahmad, who worked for him during his first time. visit to JPMorgan. .

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