JP Morgan must tighten risk controls, say US regulators

JPMorgan building JP Morgan still faces investigation by regulators in both the US and the UK

JP Morgan Chase, which lost billions of dollars in trades by an employee known as the London Whale, must revamp its risk management, regulators have said.

The bank was told to examine how it pays top executives, and how they are rewarded for taking on risk.

JP Morgan and its board agreed to submit a plan within 60 days.

However, the US Federal Reserve and the Office of the Comptroller of the Currency stopped short of apportioning blame or fines for the trading errors.

Stricter controls

In April, reports emerged of a London-based trader, Bruno Iksil who was called the London Whale because the positions he took were big enough to move markets.

This is the first regulatory action since the bank revealed it had lost $6.2bn (£3.8bn) in those derivatives trades.

Regulators asked the bank to tighten internal controls, risk management and oversight from the board.

JP Morgan said it "has been working hard to fully remediate the issues".

The bank's own report into the incident is due to be published this week when JP Morgan announces its fourth-quarter earnings.

JP Morgan still faces investigations by the US Department of Justice, the Securities and Exchange Commission as well as the UK Financial Services Authority among others.

Money laundering

In a separate case the OCC and the Federal Reserve also criticised the bank for lapses in its anti-money laundering rules.

It comes after JP Morgan reached a settlement of $88m with the US Treasury Department in 2011, in a case of violating US sanctions.

The accusations centred around wire transfers processed by JP Morgan to Cuba and Sudan, as well trade loans with Iran.

JP Morgan said it had made progress addressing the issues.

More on This Story

Related Stories

From other news sites

* May require registration or subscription

More Business stories



  • Firth of Forth bridgeWhat came Firth?

    How the Forth was crossed before the famous bridge

  • Petrol pumpPumping up

    Why are petrol prices rising again?

  • Image of George from Tube CrushTube crush

    How London's male commuters set Chinese hearts racing

  • Elderly manSuicide decline

    The number of old people killing themselves has fallen. Why?

  • TricycleTreasure trove

    The lost property shop stuffed with diamonds, bikes... and a leg

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.