JPMorgan Chase admits it broke the law and agrees to pay $1 billion in fines
September 20, 2013
To settle charges in the “London Whale” trading scandal, JPMorgan Chase admitted wrongdoing and will pay three government agencies $920 million in penalties.
The Securities and Exchange Commission charged JPMorgan with misstating financial results and lacking effective controls to prevent its traders from overvaluing investments to hide hundreds of millions of dollars in trading losses.The SEC previously charged two former JPMorgan traders with committing fraud to hide the massive losses.
“JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses,” said George S. Canellos, co-director of the SEC’s Division of Enforcement. “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.”
JPMorgan has agreed to settle the SEC’s charges by paying a $200 million penalty and publicly acknowledging that it violated the federal securities laws.
As part of a coordinated settlement, three other agencies also announced settlements with JPMorgan Thursday: the Federal Reserve, Office of the Comptroller of the Currency, and U.K. Financial Conduct Authority. JPMorgan will pay a total of about $920 million in penalties in these actions by the SEC and the other agencies.
A second set of settlements includes $80 million for billing credit-card customers for identity-theft protection services that they never received. The deals were made with the OCC and the Consumer Financial Protection Bureau.
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