Mr Wallace, who quit two weeks ago, has not revealed what position he will be taking up but has confirmed that he is leaving the sphere of investment banking altogether.
However, with Wall Street banks recently losing key staff in their investment banking wing to the allure and better pay offered by hedge funds, speculation is rife that Wallace's new role will be this area.
Commenting on his decision in an interview with Bloomberg, Mr Wallace said: "They do have a great team and have a very deep bench and tremendous amount of momentum in their business.
"It was a difficult decision. We hope that I will be a client for them in the future and they will be a bank for me," he added.
Last month JP Morgan reported net income of Â£14.4 billion for 2006, up from $8.4 billion in 2005.