JPMorgan Chase & Co.'s second quarter earnings results may be "substantially different" than it initially announced because of what appears to have been a serious risk management failing in the bank's Chief Investment Office, JPMorgan announced late Thursday afternoon.

The problem appears to stem from "significant mark-to-market losses" in the bank's synthetic credit portfolio, which "has proven to be riskier, more volatile, and less effective as a hedge than the firm previously believed."

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.