Washington, Sep 21 (IANS/EFE) JPMorgan Chase & Co., the US’ largest bank by assets, has agreed to pay $920 million to the US and British regulators to settle violations connected with a derivatives trading scandal.
The failure of the bank’s internal controls on transactions by a former Britain-based trader, who came to be known as the “London whale” because of his team’s massive derivatives bets, led to a trading loss of roughly $6 billion last year.
The Securities and Exchange Commission (SEC) said Thursday it had charged JPM with “mis-stating financial results and lacking effective internal controls to detect and prevent its traders from fraudulently overvaluing investments to conceal hundreds of millions of dollars in trading losses.”
“While grappling with how to fix its internal control breakdowns, JPMorgan’s senior management broke a cardinal rule of corporate governance,” George S. Canellos, co-director of the SEC’s Division of Enforcement, was quoted as saying in a release.
The bank’s senior management, he said, “deprived its board of critical information it needed to fully assess the company’s problems and determine whether accurate and reliable information was being disclosed to investors and regulators”.
JPM will pay $300 million to the US Office of the Comptroller of the Currency, $200 million to the SEC and $200 million to the Federal Reserve.
The bank will pay an additional $220 million to Britain’s Financial Conduct Authority.
As part of the settlement, JPMorgan publicly acknowledged that it violated federal securities laws, the SEC said.