JPMorgan Chase, seeking to end probes of a trading debacle that damaged its reputation for risk management, agreed to pay about US$920 million for failing to implement adequate controls and providing incomplete information to regulators and its board.
The settlement resolved claims by the US Securities and Exchange Commission, Office of the Comptroller of the Currency, Federal Reserve and the British Financial Conduct Authority, the Fed said yesterday in a consent order against the bank.
The Department of Justice and the Commodity Futures Trading Commission are among agencies still investigating the trading loss in London at the chief investment office (CIO), a unit of the New York-based bank that was supposed to help reduce risk and manage excess deposits.
The more than US$6.2 billion in losses led to the indictment of two former traders this week, the departure of at least four senior managers and a blow to the reputation of chief executive Jamie Dimon, whose pay was halved.
The firm restated results, and its market value fell by almost US$51 billion after disclosing errant bets made by Bruno Iksil, a trader who became known as the London Whale because his positions were so large.
JPMorgan "exercised inadequate oversight over the CIO and failed to implement adequate controls to ensure the full and adequate disclosure of relevant information to senior management" and the board, the Fed said in the consent order.
The bank acknowledged it violated federal securities laws, according to an SEC statement.
"JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses," the statement said.