-
In an email to employees, Jamie Dimon said the company is focused on eliminating products and services that aren't core to the business, while also boosting compliance with regulatory initiatives and improving oversight of outside vendors.
September 17 -
Receiving Wide Coverage ...'Whale' Settlement: Anonymice are telling their favorite news outlets that JPMorgan Chase is nearing an about $750 million to $800 million settlement with U.S. and U.K. regulators related to last year's pesky $6 billion "London Whale" trading loss. In a big win for the Securities and Exchange Commission, the civil settlement, which could be announced as early as this week, is expected to include an admission of wrongdoing. This admission, part of the SEC's harder stance on enforcement actions, "could open the bank to additional legal liability from shareholder suits, although securities lawyers said the bar is high to prove the bank intentionally misled investors," the Journal notes. Spokespersons for the bank and regulators, which also include the Office of the Comptroller of the Currency, the Federal Reserve and the U.K. Financial Conduct Authority, have yet to formally comment on the forthcoming settlement. Anonymice are billing the move as part of JPM's efforts to repair its frayed relationships with regulators, calm upheaval at the bank and finally put the trading loss behind it, but the new settlement may not be the last time the bank has to deal with the undead "Whale." "The Commodity Futures Trading Commission, the regulator overseeing the market in which the losses occurred, has balked at joining the broader settlement and plans to fine the bank later this year," unnamed sources tell Dealbook. The settlement also won't mark the end of the megabank's regulatory woes, given all the probes that are still pending. "As a result of these cases, [JPM] said it anticipates $6.8 billion in future legal costs in excess of the money it has already set aside to handle litigation," the Washington Post notes.
September 17 -
Having one risk expert on the boards risk committee is better than none, but a bit like having a general physician in an operating room when a heart surgeon, oncologist or anesthesiologist is needed.
September 16
WASHINGTON JPMorgan Chase will pay $920 million in regulatory fines related to its London Whale trading scandal, adding to the $6 billion in losses the bank already took as a result of the trades.
The fines were assessed by the Federal Reserve Board, Office of the Comptroller of the Currency, Securities and Exchange Commission and the United Kingdom's Financial Conduct Authority, with each citing "unsafe and unsound practices" related to the bank's derivatives business.
The OCC, which assessed a $300 million civil money penalty, said that the bank "failed to identify and prevent certain credit derivatives trading" that resulted in massive losses to the institution. It also criticized JPMorgan for inadequate oversight and governance to protect the "to protect the bank from material risk."
"Banks are in the business of managing risk, and bank management must implement the appropriate governance, controls, risk management and audit functions to ensure the bank operates in a safe and sound manner," Comptroller Thomas Curry said in a press release. "Bank management must also ensure open and effective communication with supervisors, so that we can effectively do our jobs. Anything less is unacceptable and will not be tolerated."
Curry said the nearly $1 billion in fines combined with the losses should serve as "important reminders to all bankers of the importance of prudent controls, strong governance, and effective risk management."
The Fed and the SEC each assessed a $200 million penalty, while the U.K.'s FCA assessed a penalty of roughly $220 million. The Fed and SEC actions are against JPMorgan's holding company, while the OCC and FCA actions are against the bank.
In a statement, the bank said the settlements are a "major step" in the company's effort to "put these issues behind it."
"We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them," said Jamie Dimon, the chairman and CEO of JPMorgan. "We will continue to strive towards being considered the best bank across all measures not only by our shareholders and customers, but also by our regulators."
The bank said it has worked to improve its processes to ensure a similar trading losses cannot happen again.
