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September 20, 2013

‘London Whale’ scandal costs JPMorgan nearly $1B

JPMorgan Chase, the country’s largest bank, will pay almost $1 billion in fines and admit that it failed to rein-in loose trading practices that led to a $6 billion loss last year, U.S. and U.K. regulators said Thursday.

Authorities said the bank has been ordered to pay a combined $920 million fine after a yearlong investigation into the “London Whale” scandal that rekindled global fears of another 2008-style meltdown of the financial sector.

The investigation concluded that more than $6 billion in derivative deals were lost after JPMorgan regulators vastly underestimated their losses in April and May of 2012. JPMorgan employees working on the financial data were required to keep their work “strictly confidential,” thus preventing regulatory trade examiners from conducting inspections, according to a report by the Securities and Exchange Commission.


Public interest advocates, however, believe that more needs to be done to prevent a future catastrophe.

“’JPMorgan’s admission of certain facts and acknowledgment that it violated the law is an important step in the right direction’ said Dennis Kelleher, president of Better Markets, a nonprofit organization that promotes the public interest in financial markets. ‘But, using shareholder money to pay headline-grabbing fines to buy a get-out-of-jail-free card for its executives will not end the Wall Street crime spree.'”


Read full Washington Times article here

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