WSJ: How JP Morgan Chase Scooped The Fed

.P. Morgan Chase & Co. (JPM) did more than pass the Federal Reserve's "stress test"--it beat the Fed to the punch in announcing its results.

That move left some rival bankers seething.

The Fed told many of the nation's largest banks around midday Tuesday that it would announce stress-test results at 4:30 p.m. EDT, after the close of the New York Stock Exchange, and that banks could issue news releases about increasing their dividends or share buybacks after the Fed's release.

But J.P. Morgan, the nation's largest bank, issued a news release at 3:04 p.m. outlining its results and plans. Its shares jumped 7% after the release and pulled up other bank stocks. The next bank to disclose that it had passed the test was U.S. Bancorp (USB) at 3:58 p.m., just before the market close.

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Several rival banks said they received instructions from the Fed to stay quiet until the central bank put out its own results for all 19 banks covered by the latest stress test.

An executive at one rival bank said the bank was instructed by the Fed "not to tell anyone" the results.

The banks said they were frustrated by J.P. Morgan's release because they felt they were playing by the Fed's rules.

The J.P. Morgan announcement was the result of miscommunication between the Fed and J.P. Morgan, said a senior Fed official, who also indicated that it wasn't J.P. Morgan's fault.

The quick J.P. Morgan release had its origin in a decision by the Fed to put out its numbers earlier than expected.

The Fed announcement of the results originally had been planned for Thursday. But the banks were told that there was "a leak" of information about the tests and plans for raising capital, so the Fed decided to move up its announcement to Tuesday, said people familiar with the matter.

One person familiar with J.P. Morgan's talks with the Fed said there was a discussion about timing and an honest misunderstanding on both sides about what the plan was.

Adding to the confusion was a scramble on both sides: Not only was the Fed working to put out results two days earlier than planned, but Tuesday was also a day when top Fed officials were releasing their statement on monetary policy.

Another person familiar with the matter said J.P. Morgan wasn't given specific guidance about timing during the meeting.

J.P. Morgan also shared a draft of its news release with the Fed before it went out, this person said.