J.P. Morgan Chase reaches settlement on trading scandal, still facing investigation
Despite having already agreed to pay the U.S. Securities and Exchange Commission (SEC) $920 million in fines directly relating to the scandal, J.P. Morgans employees are now facing additional questioning and potential civil action from federal regulators.
September 20, 2013 at 07:46 AM
5 minute read
The original version of this story was published on Law.com
After costing an estimated $6 billion dollars, and with criminal investigations pending for the two ex-employees who orchestrated it, the “London Whale” debacle is unquestionably a matter that mega bank J.P. Morgan Chase would like to put to bed. But Federal regulators are saying, in essence, “not so fast.”
Despite having already agreed to pay the SEC $920 million in fines directly relating to the scandal, J.P. Morgan's employees are now facing additional questioning and potential civil action from federal regulators.
According to the SEC, pursuing those involved with the scandal was the first step, but that doesn't mean J.P. Morgan is off the hook. According to an SEC statement, “subsequent action against JPMorgan faults its internal controls for failing to ensure that the traders were properly valuing the portfolio, and its senior management for failing to inform the firm's audit committee about the severe breakdowns in CIO's internal controls.” The report goes on to say that the investigation will continue.
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