Several regulators in the U.S. And the U.K. Have imposed fines totaling about 920 million dollars (680 million euros) on the largest american bank, according to the U.S. Federal reserve on thursday. Jpmorgan chase acknowledged having agreed to appropriate settlements.
Supervisors accuse jpmorgan chase of sloppiness in risk controls. A london division of the high street bank amassed billions in losses last year on derivative transactions. One of the traders responsible was nicknamed the "whale of london" because of the market-moving nature of the speculation. The extent of the disaster remained hidden from new york’s central office for a long time.
Jpmorgan’s failings were "very serious," said tracey mcdermott of the u.K. Regulator the FCA. The bank’s top management had ignored initial warning signs. "When things started to get out of hand, the company didn’t grasp the magnitude and extent of the problems quickly enough." The disaster ultimately sent "shock waves" through the markets. Mcdermott demanded: "companies must learn from this incident."
Under pressure from the US securities and exchange commission (SEC), jpmorgan chase admitted wrongdoing – which was not a matter of course in previous comparisons. Bank CEO jamie dimon explained that the institute had "acknowledged its mistakes from the beginning" and accepted responsibility.
Dimon, however, had dismissed initial media reports about the gigantic financial bets and their risks as a "storm in a teacup," which he later regretted. In addition, initial calculations of the amount of the speculative loss proved to be too low. But in the end, jpmorgan coped well with the shortfall: last year, it still made a record profit.
Dimon took a pay cut because of the debacle, but ultimately remained firmly in the saddle. The responsible investment manager ina drew, on the other hand, had to go. As recently as august, the manhattan district attorney’s office also indicted two former london jpmorgan bankers. They had concealed the accumulated losses, according to the accusation.
According to information from US media, however, the speculative debacle for jpmorgan is not yet over, even with the penalty payment. According to the report, the derivatives market regulator CFTC and prosecutors are continuing to investigate.
The bank, once considered a model institution, is currently struggling on many fronts. Among other things, there are allegations of fraud in connection with mortgage securities and the reference interest rate libor. Jpmorgan recently paid 410 million dollars for alleged manipulation of the u.S. Electricity market. Most recently, the wall street firm added a good $1.5 billion to its litigation reserve.
The bank was also in trouble for selling unprofitable products to credit card customers. Here they could agree on wednesday with the competent authority on a settlement. This costs a total of 389 million dollars – of which 309 million dollars go to the slightly more than 2.1 million affected customers.