JPMorgan Chase & Co. agreed to pay 920 million U.S. dollars to settle regulatory probes into its "London Whale" trading debacle which cost the company as huge as 6. 2 billion dollars in losses on trades in credit derivatives last year, U.S. and British financial regulators said on Thursday.
The largest U.S. bank by assets also admitted wrongdoing as part of its broad settlements with three U.S. regulators and the British Financial Conduct Authority, which charged the bank with misstating financial results and lacking effective controls to detect and prevent losses.
The U.S. Office of the Comptroller of the Currency levied the largest penalties among the regulators: 300 million dollars, while the Federal Reserve Board the U.S. Securities and Exchange Commission (SEC) each fined the bank 200 million dollars. The British regulator fined the company 220 million dollars.
The SEC also required a rare admission of wrongdoing.
JPMorgan admitted the facts underlying the SEC's charges, publicly acknowledging that it violated the federal securities laws. "The settlements are a major step in the firm's ongoing efforts to put these issues behind it," JPMorgan said in a statement.
Most wrongdoers have been settling charges without admitting misconduct for more than 40 years. From August, the SEC started to require admission of culpability in some cases, a sign that the Wall Street top cop will be tougher in the future.
"We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them," JPMorgan CEO Jamie Dimon said. "We will continue to strive towards being considered the best bank -- across all measures -- not only by our shareholders and customers, but also by our regulators."
The bank said it cooperated extensively with each of these inquiries and continues to cooperate with ongoing inquiries, including the criminal prosecution by the U.S. Justice Department of two former traders.
Federal prosecutors in New York filed criminal charges of falsifying records to hide the losses last month against Javier Martin-Artajo and Julien Grout. Both traders, through their lawyers, have denied any wrongdoing.
But Bruno Iksil, a third trader known as the "London Whale" for the size of the derivatives trades he made, was not charged after gaining immunity in exchange for helping with the investigation.