JPMorgan agrees to huge fine
September 19, 2013
The largest bank in the US agreed to pay a series of US and UK regulators penalties totaling $920 million (679 million euros) on Thursday, after racking up more than $6 billion in trading losses last year. The regulators penalties focused on failures in risk management and financial reporting systems at JPMorgan Chase & Co.
Trader Bruno Iksil, who earned the nickname the "London Whale," was uncovered last year assigning inflated values to derivatives trades in order to cover up ballooning losses. The lid was lifted in May last year, after media reports suggested the bank's London office was in trouble - and after an initial response from Chief Executive Jamie Dimon calling it a "tempest in a teapot."
"We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them," Dimon said in a statement issued by the company on Thursday. "We will continue to strive towards being considered the best bank – across all measures – not only by our shareholders and customers, but also by our regulators."
The JPMorgan boss has repeatedly apologized for dismissing the case when it first came to light last year.
JPMorgan's penalties include a $300-million fine to the US Office of the Comptroller of the Currency, $200 million to the US Securities and Exchange commission, another $200 million to the Federal Reserve and around $220 million to the UK's Financial Conduct Authority.
Rogue trader Iksil signed a cooperation agreement with prosecutors and is not currently facing any charges.
Unusually in a case where a financial institution made a settlement with the Securities and Exchange Commission (SEC), the SEC demanded that JPMorgan acknowledge its violation of securities law in failing to keep a closer watch on its traders. Typically, the SEC will permit an organization agreeing to pay penalties to neither admit nor deny concrete charges of wrongdoing.
According to media reports in the US, public prosecutors and the US Commodity Futures Trading Commission - responsible for derivates trading - may file further charges against JPMorgan.
msh/rg (AP, dpa, Reuters)