JP Morgan will pay $100 million to close an investigation into the ‘London Whale’ scandal and admitted that its behavior was reckless and manipulative over the financial transactions. As a result the bank lost over $6.2 billion.
JP Morgan settlement with the Commodity Futures Trading Commission (CFTC ) raises the combined value of the agreements concluded by the bank for the London Whale scandal to over $1 billion.
“I would not have supported the Order unless JPMorgan had admitted to such findings of fact,” said Bart Chilton, Democrat, CFTC Commissioner.
JPMorgan agreed in September to pay $920 million for closing investigations in the U.S. and UK relating to the implementation of internal controls and bank transactions that caused losses of at least $6.2 billion last year.
The Securities and Exchange Commission (SEC) announced that this investigation will remain open while the Department of Justice will conduct a parallel investigation.
In April last year, Jamie Dimon, chief executive officer of JP Morgan, initially dismissed reports that the bank’s derivative transactions distort markets, considering that it is just a “tempest in a teapot.” A month later, JP Morgan revealed losses of $6.2 billion.
The bank admitted in the settlement with the SEC that there were gaps in surveillance activities and that it violated federal securities laws.
JP Morgan ‘s trading operations were also faulted by the Senate, the U.S. Office of the Comptroller, the Federal Reserve and the UK Financial Conduct Authority.
JPMorgan has been trying in the last few months to close investigations on its energy trading operations, credit card financing and sales of mortgage-backed bonds.
The bank announced last week that it has allocated a $7.2 billion charge for expenses related to litigation and regulatory matters. Therefore, JP Morgan recorded in the third quarter a loss of $380 million, the first negative quarterly result during Jamie Dimon’s time at JP Morgan’s helm.
Reply