JPMorgan CEO Jamie Dimon Calls For Ban On Shorting Banks: 'Some People Are Unscrupulous'

As bank stocks continue to face heavy selling pressure, JPMorgan Chase & Co JPM CEO Jamie Dimon is calling for a ban on shorting banks. 

What To Know: In a Bloomberg interview released Thursday, Dimon indicated that short sellers who are targeting banks are probably partly responsible for problems in the broader financial sector. 

"My folks would tell me that’s not the problem ... if you actually analyze stocks and short sales, it doesn’t seem that big of a deal. I think they may be partially wrong because, as you know, some people are unscrupulous, and they use other means to go short," Dimon said. 

The JPMorgan chief suggested that some short sellers may be using illegal means of targeting bank stocks with bearish bets. If that's the case, the SEC should swiftly initiate an appropriate response, he said, adding regulators have the capability of identifying people who may be acting outside the lines. 

"If people are going short and then making a tweet about a bank, they should go after them, and vigorously. They should be punished to the full extent the law allows it, so I guess it’s possible it’s taking place, we have no evidence of it, but my experience in life has been 'don’t assume too much,'" Dimon said.

See Also: Jamie Dimon Reportedly Warns US Debt Default Could Cause Financial Panic

Last week, U.S. officials said they were in the process of determining whether "market manipulation" has driven elevated volatility in the banking sector, per Reuters. 

White House Press Secretary Karine Jean-Pierre reportedly said the Biden administration was monitoring the situation, but any response would need to come from the SEC. 

The American Bankers Association also called on the SEC to look into short selling of banks last week. 

"We urge the SEC to consider all its existing tools and to take measures to reduce the avenues for abusive trading practices and restore investor confidence," the ABA said. 

In March, the SEC made it clear that it was paying close attention to market stability and would prosecute any misconduct that was discovered. Last week, SEC Chair Gary Gensler reupped that message, noting that regulators were focused on "prosecuting any form of misconduct that might threaten investors."

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JPM Price Action: JPMorgan shares were down 0.33% at $136.03, at the time of writing, according to Benzinga Pro.

Photo: Fortune Live Media from Flickr.