Wall Street is getting its first high-profile opportunity to prove it is serious about recovering pay from executives whose blunders waste shareholder treasure.

J.P. Morgan ChaseJPM +0.69% & Co., the nation’s biggest bank by assets, is expected to try to claw back some of the pay it awarded to executives and traders at the unit at the center of a trading debacle that has cost it more than $2 billion. Clawbacks at the unit, known as the Chief Investment Office, are “likely,” a person close to the bank has said…

Companies previously have occasionally invoked clawbacks, largely for clear-cut wrongdoing such as rogue trading or financial restatements. But data on bank-clawback efforts are scarce, and a case involving trading losses that may have stemmed from management-approved strategies could be a tricky proposition.

“This will be a precedent-setting case,” said Alan Johnson, the founder of Johnson Associates Inc., a New York-based compensation firm. “Everyone is watching this closely.”

The Wall Street Journal / May 17, 2012