Skip to main content

Newsroom

October 17, 2013

JPMorgan Admits the Obvious: We Were Reckless

“JPMorgan Chase & Co. (JPM)’s chief executive officer, Jamie Dimon, initially called the bank’s “London whale” trading debacle a “tempest in a teapot.” Some teapot. Today the bank agreed to pay $100 million to settle an action brought by the Commodity Futures Trading Commission. But more important than that relatively modest sum is the bank’s admission that its traders were “recklessly aggressive.”

The new settlement brings to more than $1 billion the penalties the bank has had to pay for the London whale and, with more cases to come, that figure could grow. The real news, though, is that after decades of allowing companies to “neither admit nor deny” wrongdoing when settling cases, regulators are insisting that they admit guilt.

JPMorgan’s concessions in today’s CFTC case and last month’s Securities and Exchange Commission settlement signal that Wall Street firms no longer can flout the law and then, if caught, dismiss the resulting penalties as a cost of doing business. This is a sea change in U.S. law enforcement, one with far-reaching consequences.

A mea culpa in the CFTC case exposes JPMorgan to client and shareholder lawsuits for having built, then unloaded, huge trading positions that distorted the normal supply and demand signposts in the market. The bank’s London investment office, operating much like a hedge fund, accumulated a $157 billion position in credit-derivative indexes, which track the default risk of baskets of corporate debt.”

***

Read full Bloomberg article here

In the News
Share

MEDIA REQUESTS

For media inquiries, please contact us at
press@bettermarkets.org or 202-618-6433.

Contact Us

For media inquiries, please contact press@bettermarkets.org or 202-618-6433.

To sign up for our email newsletter, please visit this page.

Name(Required)
This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact press@bettermarkets.org or 202-618-6433.

Donate

Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today