JPMorgan to pay $100 million to settle London Whale claims
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Washington: JPMorgan Chase & Co., the largest US bank, agreed to pay $100 million to resolve Commodity Futures Trading Commission claims that the company deployed a recklessly aggressive trading strategy in derivatives bets last year, CFTC Commissioner Bart Chilton said in a statement on Wednesday.
The accord, which Chilton said stems from JPMorgan’s conduct on 29 February, 2012, brings the bank’s settlements from the London Whale trades to more than $1 billion.
Admitting to these findings of fact needs to be something part and parcel to these types of settlements, Chilton said in his statement.
I would not have supported the Order unless JPMorgan had admitted to such findings of fact. Going to court on the matter would have been an acceptable avenue from my perspective.
JPMorgan agreed in September to pay $920 million to resolve related US and UK probes into its internal controls and handling of the trades, which inflicted at least $6.2 billion in losses last year. The accords don’t end all of the investigations into the bets managed by Bruno Iksil, the trader known as the London Whale because his positions were large enough to move markets.
The Securities and Exchange Commission has said its inquiry remains open while the US Justice Department runs a parallel probe. Iksil, who prosecutors have said is cooperating with their case, hasn’t been charged.
In April last year, JPMorgan chief executive officer Jamie Dimon initially dismissed reports that the derivatives bets were distorting markets, calling the attention a tempest in a teapot. The bank disclosed mounting losses a month later.
The bank admitted in its SEC settlement that internal oversight of the trades suffered from lapses and that the firm violated federal securities laws. The company’s handling of the trades also has been faulted by Senate investigators, the US Office of the Comptroller of the Currency, Federal Reserve and UK Financial Conduct Authority.
JPMorgan has sought in the past few months to resolve probes into businesses including energy trading, credit-card lending and bundling of mortgages into bonds. The bank said 11 October it took a $7.2 billion charge for expenses tied to regulatory matters and litigation, leading to its first quarterly loss during Dimon’s tenure.
The company has yet to resolve state and federal probes into its mortgage-bond sales, including a criminal inquiry. JPMorgan has been discussing a potential $11 billion deal with authorities looking into that business, a person with knowledge of the talks said in September. BLOOMBERG