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September 19, 2013

Whale Scandal Costs JPMorgan $920 Million in Fines

The ‘London Whale’ trading scandal, once dismissed as a “tempest in a teapot” by JPMorgan Chase & Co CEO Jamie Dimon, is costing the largest U.S. bank $920 million in penalties and a rare admission of wrongdoing.

Settlements with four U.S. and British regulators, made public on Thursday, resolve the biggest civil probes of the bank’s $6.2 billion of derivatives trading losses last year. Citations against JPMorgan include poor risk controls and failure to inform regulators about deficiencies in risk management identified by bank management.

JPMorgan called the settlements ‘a major step in the firm’s ongoing efforts to put these issues behind it.’

But the deals leave unresolved other issues that have helped drive the bank’s legal costs to $5 billion a year and undermined Dimon’s hold on his job, as well as his influence on the banking industry and its regulation.”

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Read full New York Times article here

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