JPMorgan Chase & Co. (NYSE:JPM) has been ordered to pay $920 million in fines for misconduct in the infamous London Whale scandal to government authorities in Washington and London, which will close various investigations over a multi-billion trading errors suffered by the bank last year, says a report from The New York Times. JP Morgan will pay around $300 million to the Comptroller’s office and around $200 million to other agencies.
“Bank management must also ensure open and effective communication with supervisors so that we can effectively do our jobs,” Thomas Curry, the comptroller of the currency, said in a statement. “Anything less is unacceptable and will not be tolerated.”
Authorities that are involved in the probe are the Securities and Exchange Commission (SEC), the Office of the Comptroller of the Currency, the Federal Reserve and the Financial Conduct Authority in London.
Another agency, the Commodity Futures Trading Commission, is as of now negotiating with the Bank and will most probably place extra fines on JPMorgan Chase & Co. (NYSE:JPM) towards the end of this year. Investigations are still being carried on by the FBI and federal prosecutors in Manhattan.
The main objective of the primary investigation was to find out if the losses were caused due to negligence and a weak control system at JP Morgan. According to people familiar with the matter, JP Morgan was expected to accept that it has weak controls and should have identified the problem quicker. No senior executives are expected to be at fault in the settlement.
What caused the losses at JPMorgan?
JPMorgan Chase & Co. (NYSE:JPM) suffered a loss due to big derivative wagers in the chief investment office of the bank in London. The incident also gave JPMorgan a tainted reputation for being a bank with poor risk handling capability. After the incident, JP Morgan faced various investigations and probes.
Two of the JPMorgan Chase & Co. (NYSE:JPM) traders were charged by criminal authorities in an August investigation. One of the officers is Javier Martin-Artajo, a bank manager who was supervising the trading strategy, and the other one was Julien Grout, a low-level trader who marked the books. Both of them were charged with falsifying bank records and contributing to false regulatory filings by federal prosecutors in Manhattan of wire fraud.
