JP Morgan Chase hit with $920m in fines over London “whale” trading fiasco

British and US authorities hit JPMorgan Chase with $920 million in fines yesterday for wrongdoing related to the "London whale" trading losses, which saw the largest US bank by assets lose $6 billion last year.

In the US, the Office of the Comptroller of the Currency levied a $300 million fine for "unsafe and unsound practices". The Securities and Exchange Commission levied a $200 million fine for "a failure to maintain effective internal controls over financial reporting". The Federal Reserve levied a $200 million fine for deficiencies including "senior management's elevation of issues to the board of directors".

In the UK, the Financial Conduct Authority levied a fine of £137.6 million for a failure in "skill, care, and diligence, management and control, proper market practice, and disclosure to regulators".

The bank started a self-inflicted crisis from which it is yet fully to recover when traders in a London division of its chief investment office placed a botched position on credit derivatives. Jamie Dimon, chief executive, initially referred to the position as a "tempest in a teapot" in an April 2012 earnings call before revealing large losses. In the same call, Doug Braunstein, then chief financial officer, said the positions in question were "fully transparent to the regulators [who] . . . get information on those positions on a regular and recurring basis as part of our normalised reporting".

But an investigation found the regulator was not aware of the specific positions.
– (Copyright The Financial Times Limited 2013)