Posted Sep 19, 2013 02:06 pm CDT
JPMorgan Chase has agreed to pay $920 million and admitted wrongdoing in connection with the so-called “London whale” scandal.
The agreement disclosed on Thursday stems from risky 2012 trades by London traders that resulted in $6.2 billion in losses, report the New York Times DealBook blog, USA Today and Reuters. The lead trader whose trading bets backfired has been dubbed the “London whale.”
The agreement resolves investigations by the Securities and Exchange Commission and three other agencies. The agency still faces probes by federal prosecutors in New York and the Commodity Futures Trading Commission, USA Today says.
George Canellos, co-director of the S.E.C.’s enforcement division, issued a statement saying JP Morgan did not exercise appropriate oversight.
“JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses,” Canellos said. “While grappling with how to fix its internal control breakdowns, JPMorgan’s senior management broke a cardinal rule of corporate governance and 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.”
ABAJournal.com: “Two former JPMorgan traders charged in ‘London whale’ scandal”