Bank order led to losing trades

JP Morgan Chase and Co. told traders several months ago to make bets aimed at shielding the bank from the market fallout of Europe’s deepening mess. But instead of shrinking the risk, their complicated bets backfired into losses of as much as $200 million a day in late April and early May, people familiar with the situation said.

Regulators in the US and UK are examining what went wrong, who is responsible and whether JP Morgan should have told investors about the losses sooner, according to people familiar with the matter.

While attention has focused on large positions taken by a trader nicknamed “the London whale”, he and other traders were carrying out instructions from a bank executive, these people said.

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