The Securities and Exchange Commission apparently wants JPMorgan Chase & Co. (NYSE:JPM) to admit to wrongdoing in the so-called “London Whale” case. However, the Whale himself apparently won’t face charges, according to a report by Dan Fitzpatrick, Jean Eaglesham and Gregory Zuckerman in The Wall Street Journal.
JPMorgan tries to settle with SEC
Sources told The WSJ that as part of the settlement in the civil case against JPMorgan Chase & Co. (NYSE:JPM), regulators want the bank to admit to wrongdoing. This would be different from most other similar settlements, which don’t require companies to admit or deny doing wrong. The SEC has apparently put the London Whale case on its short list of cases that could show off new SEC Chairman Mary Jo White’s policy of requiring companies in individuals in some cases to admit that they did wrong or otherwise be taken to court.
For much of the past decade, Crispin Odey has been waiting for inflation to rear its ugly head. The fund manager has been positioned to take advantage of rising prices in his flagship hedge fund, the Odey European Fund, and has been trying to warn his investors about the risks of inflation through his annual Read More
Sources said the case was chosen because of how high profile it is. However, this does not mean that an admission of guilt will definitely be part of the final settlement deal. Regulators are still examining how JPMorgan Chase & Co. (NYSE:JPM) handled the situation, including the internal controls that were in place and the disclosures it made to investors. The bank has admitted to making mistakes before it revealed just how bad the trading losses were, although it said Chief Executive Officer Jamie Dimon and the bank’s chief financial officer at that time didn’t purposely mislead anyone.
‘The London Whale’ won’t be charged
Bruno Iksil, the trader who became known as the London Whale because of his extremely risky trades, probably won’t face charges in the case. His risky bets ended up losing JPMorgan Chase & Co. (NYSE:JPM) more than $6 billion early last year. The Department of Justice has been investigating to figure out if Iksil and the other traders whose risky bets contributed to the losses purposely misvalued the positions to either understate or hide the severity of the losses.
Sources told The Wall Street Journal that Iksil himself is no longer under investigators’ microscope. There is still a chance that they will end up filing charges against him, although that probably won’t happen unless there’s new evidence brought to light. Sources said it’s unclear what caused investigators to stop focusing on filing charges against Iksil, although there’s evidence that he tried to warn those involved about how risky the bets were.
The investigations into the London Whale case could wrap up within the next few months, although there’s not yet been an agreement made between JPMorgan Chase & Co. (NYSE:JPM) and investigators.
Also check out our exclusive on the London Whale – How Hutchin Hill Took Down JPMorgan