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View Full Version : Scandals cost JPMorgan $1 billion in fines



littleroundman
09-19-2013, 10:55 PM
Scandals cost JPMorgan $1 billion in fines


REUTERS - It's $1 billion in payouts that JPMorgan Chase & Co most likely wants to forget.

In agreements with regulators totaling $1 billion and made public on Thursday, the U.S.'s biggest bank settled four civil investigations into its "London Whale" trading scandal and two more into the wrongful billing of credit-card customers.

The deals, which involve five authorities from the United States and one from the UK, are a milestone in the company's push to clean up its legal affairs but leave JPMorgan exposed to additional costs and embarrassment.

The bank still faces criminal probes into the trading scandal, its conduct during an energy trading investigation, sales of mortgage securities in the United States and possible bribery in China. Investigators are also looking into its role in setting benchmark interest rates known as LIBOR.

The settlements include $920 million of penalties for JPMorgan's London Whale trading scandal, which Chief Executive Jamie Dimon at first dismissed as a "tempest in a teapot" and ultimately resulted in $6.2 billion in losses. The deals included an admission of wrongdoing, which has been rare in past settlements made by the U.S. Securities and Exchange Commission.

A second set of settlements includes $80 million of payments for billing of credit-card customers for indentity-theft protection services that they did not receive. The deals, made with the U.S. Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, come after the company issued $309 million of refunds to customers.

The Comptroller of the Currency also on Thursday ordered JPMorgan to improve its consumer debt-collection practices. That order did not include financial penalties and involved allegations made public more than two years ago.

The London Whale deals, reached with the UK's Financial Conduct Authority and the U.S. Federal Reserve, SEC and Comptroller of the Currency, resolve the biggest civil probes into the trading debacle. The deals include citations against JPMorgan for poor risk controls and failure to inform regulators about deficiencies in risk management identified by bank management.

The scandal took on the London Whale nickname that hedge funds had given to Bruno Iksil, a trader at JPMorgan's Chief Investment Office in London, for the enormous size of the positions he took for the company.


You can read the entire story here on Reuters.UK (http://uk.reuters.com/article/2013/09/19/uk-jpmorgan-whale-idUKBRE98I00820130919)