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Whale oil: Ex-Exxon exec to probe Dimon

SAN FRANCISCO (MarketWatch) -- At Exxon Mobil Corp., Lee Raymond played the tough guy. But he could. The oil business he knew wasn't very complicated: You drill, refine and sell.

With J.P. Morgan Chase & Co. (JPM) and its chief executive, Jamie Dimon, the game is more than just a little different. It's a complex tangle of trading, risks and hedges. At issue are derivatives -- synthetic and otherwise -- around the infamous "London whale" trade.

If you think the difference between the two businesses is a minor issue, consider how Dimon was able to create the chief investment office in London and convince regulators and in-house risk officers that the unit was playing it safe.

Dimon stocked his risk committee with nonbankers. He was able to quell inexperienced regulators with assurances of the bank's record in the financial crisis. J.P. Morgan's losses were less than those of its competitors.

Lest people forget: Raymond served on the bank's board while this whole mess was percolating.

Raymond, the former chief executive of Exxon (XOM) , would do well to surround himself with hedge-fund pros to gauge just how much risk J.P. Morgan was taking. So far, not good: A real-estate developer and a Johnson & Johnson(JNJ) executive have also been named to the panel.

Tough-guy routines only get you so far in business. Ask Albert "Chainsaw Al" Dunlap, who was hailed as a ruthless cost-cutter and still was named one of the worst CEOs of all time by Condé Nast Portfolio.