JPMorgan fined $100m by US regulators for London Whale
- 16 October 2013
- From the section Business
The US Commodities Futures Trading Commission has said JP Morgan will pay $100m (£62.4m) to settle with the agency over losses stemming from its "London Whale" trading debacle in 2012.
In a first, the bank will admit that its traders acted "recklessly".
The CFTC says the trades, which ultimately cost the bank $6bn in losses, distorted prices in the market.
Last month, the bank agreed to pay $920m to other regulators in the US and the UK over the bad trades.
The scandal arose from disastrous trades by former bank employee Bruno Iksil, who earned the nickname of the "London Whale" for his big bets on the financial markets.
David Meister, the head of enforcement at the CFTC, said in a statement that the traders tried "to 'defend' their position by dumping a gargantuan, record-setting volume of swaps virtually all at once, recklessly ignoring the obvious dangers to legitimate pricing forces."
The bank has found itself overwhelmed by mounting legal troubles lately.
Once the darling of Washington and Wall Street, it reported a rare quarterly earnings loss last week, mostly due to legal costs totalling $9.2bn.
The bank lost $380m during the quarter, compared with a profit of $5.7bn in the same period last year.
JP Morgan says it has set aside a fund of $23bn to deal with mounting legal costs relating not just to the "London Whale" trading debacle, but also to charges that the bank misled consumers and investors during the housing market collapse.
US media has estimated that the bank could be negotiating a settlement of several billion dollars with a variety of US regulators.
An announcement of this settlement - surely the largest banking fine in US history - is expected to be announced soon.