One of the most trusted allies of J.P. Morgan Chase & Co. Chief Executive James Dimon left the nation’s largest bank to run a payment-processing company, the latest executive to depart after a multibillion-dollar trading blunder.
The 53-year-old Frank Bisignano was barely visible outside J.P. Morgan, but was well known within the company as a fixer of operational problems and was a close aide of Mr. Dimon since 2005.
Mr. Bisignano became chief executive of Atlanta-based First Data Corp., which has 24,000 employees, processes transactions for 6.5 million merchants and last year posted annual revenue of more than $10 billion.
Mr. Bisignano is the ninth executive since early last year to exit Mr. Dimon’s operating committee, an elite group that represents all of the firm’s key decision makers.
The departure leaves the giant New York bank without one of its operational experts at a time when the bank is wrestling with a number of regulatory headaches. Since 2011 it has received a series of enforcement actions requiring changes to everything from its money-laundering controls and risk management to mortgages and public finance. The company has warned that more regulatory actions are expected in the coming months.
Mr. Bisignano said in an interview that he decided to leave J.P. Morgan because leading First Data is an “unbelievable opportunity.” He called Mr. Dimon his “mentor and friend” and said Mr. Dimon is “happy for me.”
“Any time a guy leaves to be a CEO, that is good for the guy who groomed him over time,” said Mr. Bisignano.
Mr. Dimon said in a memo to employees Sunday that Mr. Bisignano “has proven himself as a capable executive willing to take on the most complex challenges and get the job done.”
One executive who gained power as a result of Mr. Bisignano’s departure is 42-year-old Matt Zames, who on Sunday was named sole chief operating officer of the firm.
Mr. Zames helped Mr. Dimon mop up the 2012 trading mess, which cost the bank more than $6 billion, and since last July had shared the title of co-chief operating officer with Mr. Bisignano.
Mr. Zames is considered a front-runner to succeed Mr. Dimon as CEO, along with Michael Cavanagh, the co-CEO of the corporate and investment bank. Mr. Bisignano wasn’t considered a contender for the CEO job.
There could be more turmoil in the months ahead. Next month Mr. Dimon faces a nonbinding shareholder vote that would ask the bank’s board to split the titles of CEO and chair. Bank executives and directors are lobbying large shareholders to vote against the proposal.
Mr. Dimon has been the top officer at J.P. Morgan since 2005 and has held the CEO and chairman posts since 2006.
Mr. Bisignano and Mr. Dimon have known each other since the 1990s, when both worked under Sandy Weill at Citigroup Inc. While at Citi, as chief administrative officer for its investment bank, Mr. Bisignano was one of the first executives who arrived at the site of the Sept. 11, 2001, terrorist attacks.
Mr. Dimon spent years trying to recruit Mr. Bisignano away from Citi. After Mr. Bisignano arrived in 2005, he became part of the inner circle that helped Mr. Dimon dodge the worst of the 2008 financial crisis and acquire rivals Bear Stearns Cos. and the failed banking operations of Washington Mutual Inc.
It was a phone call from Mr. Bisignano a few days after the Bear Stearns acquisition that spurred workers to run fiber-optic cables beneath the streets of Manhattan, connecting the computer systems at Bear’s headquarters on Madison Avenue with J.P. Morgan’s on Park Avenue.
Mr. Bisignano also battled throat cancer during his time at J.P. Morgan, and Mr. Dimon in 2011 tapped him to turn around the company’s troubled mortgage operation.
This year Mr. Bisignano was a key part of a firmwide effort to reorganize J.P. Morgan so it could respond to heightened regulatory scrutiny following the 2012 trading loss. The Federal Reserve and the Office of the Comptroller of the Currency in January slapped the company with four enforcement actions requiring it to make a series of changes to risk management and anti-money laundering systems.
Mr. Zames said in an interview Sunday that the transition will be “seamless” because all compliance issues were handled by him, along with Mr. Bisignano. Paul Compton, who had been co-chief administrative officer of the corporate and investment bank, will become chief administrative officer for the entire bank.
“We have all the resources and commitment of Jamie and the operating committee to do whatever we have to do to become best in class around controls and compliance,” said Mr. Zames.
The First Data job came open in January when the CEO said he would retire for health reasons. Mr. Bisignano said he already is looking for an apartment in the Atlanta area. “It’s a good thing,” he said. As for J.P. Morgan, “I wore that uniform proudly and it will always be part of my body.”
Write to Dan Fitzpatrick at dan.fitzpatrick@wsj.com
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