The nation's biggest bank agreed today to pay $920 million to American and British regulators and admit wrongdoing to settle allegations stemming from a $6 billion trading loss that earned the nickname "London Whale" for the UK-based employee who took large trading positions.
Regulators, including the Securities and Exchange Commission, Federal Reserve Board and Office of the Comptroller of the Currency and the UK Financial Conduct Authority, accused the bank of "breakdowns," including failure to properly police the traders in its London office.
"JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses," said George S. Canellos, co-director of the SEC's Division of Enforcement.
"Banks are in the business of managing risk, and bank management must implement the appropriate governance, controls, risk management and audit functions to ensure the bank operates in a safe and sound manner," said
Comptroller of the Currency Thomas J. Curry.
The fines JPMorgan agreed to pay are among the largest ever against a financial institution.
"We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them," said JPMorgan CEO Jamie Dimon.
Bruno Iksil, the trader whose massive transactions got him dubbed the nickname "London Whale," is cooperating with the prosecutors and has not been charged with any crime. Two of his former co-workers from the London office, however, face criminal charges of trying to cover up the extent of the losses.
The company faces additional investigations into its business practices. The banking giant has been under scrutiny since May 2012 when Dimon admitted it was losing billions on derivative deals that had previously been questioned. Dimon had previously dismissed those concerns.