JPMorgan overhauls $2bn loss trading unit JPMorgan Chase is spinning out the "special investments group" from its troubled chief investment office as executives clean up the division that caused $2bn trading losses, say people familiar with the matter. The unit, whose investments include LightSquared, the wireless internet provider, will be moved to the bank's corporate division and prevented from seeking fresh investment opportunities, bankers were told on Wednesday. Matt Zames, the new head of the CIO, announced the changes to staff. He was appointed by Jamie Dimon, chief executive, to replace Ina Drew, who ran the CIO until its losses roiled the bank this month. The special investments group was not implicated in the CIO's losses. But Mr Zames has decided his division should be refocused on basic asset-liability management. More exotic activity, including the private equity investments and the sorts of risky credit derivatives positions that caused the $2bn losses, have been banned. The overhaul is part of a broader audit of risk-taking and risk controls at the bank. Mr Dimon and other senior executives were taken by surprise when they discovered traders in the CIO were building huge positions in credit derivatives and suffering multibillion-dollar losses, say executives. The main task for Mr Zames and his team of investment bankers who have parachuted into the CIO is to wind down the large positions without incurring further losses. Mr Dimon has said the losses "could get worse" and market participants believe they have. The special investments group made a handful of private equity investments in groups including LightSquared, which has filed for bankruptcy protection, and Johnson Publishing, publisher of Ebony magazine. Norma Corio, a 30-year veteran of the bank, will continue to run the group, which made investments of several hundred million dollars a year. It is likely to be rebranded. Even as the reorganisation was being finalised on Wednesday, the board of Technicolor, the troubled French technology company, approved a €158m investment by JPMorgan, an offer that had been managed by the special investments group but is now being moved. Shares in JPMorgan fell 2 per cent on Wednesday to $32.96. They are down 19 per cent since May 10 when Mr Dimon announced "egregious" errors relating to credit derivatives positions taken in the CIO by a trader dubbed "the London whale." Mr Dimon is due to appear before congressional committees next month as it investigates the causes and lessons of the trading fiasco. Regulators and the Federal Bureau of Investigation are examining the positions and the disclosure of the losses that came less than a month after Mr Dimon dismissed the CIO's trading activity as insignificant.