The Wall Street Journal reports that JP Morgan Chase & Co agreed to pay at least $800
million in penalties to American and British regulators as a mediation settlement of the
“London Whale” case. Meanwhile, The Washington Post tells that the amount of $750
million is mentioned in the tentative agreement.
The largest US bank acknowledged partly its fault for deficient internal controls over its
employees that had caused more than $6 billion in trading losses and the financial turmoil.
The official agreement is expected to be announced early next week. Besides, the price tag
could rise further.
The US Federal Reserve System, the Securities & Exchange Commission (SEC), the
Office of the Controller of the Currency, and the UK Financial Conduct Authority (FCA) are
supposed to be involved in the regulatory settlement.
Moreover, the bank asserts that JP Morgan did not mean to mislead investors concerning
the losses scale. According to the lending institution, former traders “deceived” the top
management.
The “London Whale” case is connected with groundbreaking scheming that was arranged
by three traders: Bruno Iksil, Julien Grout, and their supervisor Javier Martin-Artajo. Initially,
it was just Bruno Iksil who earned the nickname the “London Whale”. But then it was
investigated that he was wrongdoing at the prompting of his immediate boss. Criminal
charges were filed against Martin-Artajo and Grout by the US federal prosecutors last
month.
When operating in London, Iksil had been performing queer transactions over a long term.
He opened hazardous positions on exchange for hundreds of billions of dollars, some
trades had to be closed with heavy losses. Eventually, Iksil, his superior, and also Ina Drew,
the investment office head, quitted their jobs. While investigating the case, the US senate
asserts that the bank’s management misinformed deliberately its clients regarding their
losses.
