Skip to main content

Newsroom

October 16, 2013

JPMorgan Expected to Admit Fault in ‘London Whale’ Trading Loss

For JPMorgan Chase, fines totaling billions of dollars are no longer sufficient to placate the government. Now the bank’s regulators want something stiffer: a mea culpa.

A month after JPMorgan acknowledged that “severe breakdowns” had allowed a group of traders in London to run up $6 billion in losses, the bank has preliminarily reached a rare agreement to admit that the trading blowup itself represented reckless behavior, according to people briefed on the negotiations.

The bank could settle with the Commodity Futures Trading Commission as soon as this week, according to the people briefed on the negotiations, who were not authorized to discuss the private settlement talks. Aside from admitting some wrongdoing, the bank is expected to pay about $100 million to resolve the case, a trading debacle last year that has come to be known as the London Whale episode.

Unlike a settlement last month with the Securities and Exchange Commission, which largely took aim at porous controls and governance practices at the bank, the pact with the Commodity Futures Trading Commission zeros in on the bank’s actual trading practices. The agency, using new authority under the Dodd-Frank Act of 2010, argues that the bank’s trading was so large and voluminous that it violated a law preventing banks from recklessly using a “manipulative device” in the market for credit derivatives, financial contracts that let the bank bet on the health of companies like American Airlines.”

***

Read full New York Times 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