September 17, 2013 in Business

JPMorgan faces $800 million in fines

Andrew Tangel Los Angeles Times
 

NEW YORK – JPMorgan Chase & Co. could pay $800 million or more in penalties to settle investigations into its “London Whale” trading debacle, according to a person familiar with the bank’s negotiations with regulators.

The talks with four agencies were fluid and the total amount in penalties could change, said the person, who was not authorized to speak publicly. It was unclear which regulators might announce their settlements as soon as this week.

The regulators in question were the Securities and Exchange Commission, the U.S. Office of the Comptroller of the Currency, the Federal Reserve and the British Financial Conduct Authority.

Representatives of the regulators either declined to comment or could not be reached. A JPMorgan spokesman declined to comment.

The trading fiasco at JPMorgan has been the subject of regulatory and congressional probes for more than a year.

The bank’s bets in complex derivatives were amassed by a London-based trader nicknamed the London Whale. Ultimately, the trades cost JPMorgan more than $6 billion.

The episode tarnished the bank’s reputation for agile management and for escaping the financial crisis virtually unscathed.

Last month, federal prosecutors accused two former midlevel JPMorgan employees of covering up losses stemming from the trades.

Earlier reports by Bloomberg News, the Journal and the New York Times said JPMorgan’s potential penalties could total at least $700 million or $750 million.


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