JPMorgan was one of the few financial institutions to come through the financial crisis without suffering major losses. But in April 2012, the multi-billion-dollar trading loss surfaced, renewing worries about serious risk-taking by major banks.
The fallout even ensnared Dimon, who initially dismissed reports of the losses as a "tempest in a teapot." He later acknowledged the magnitude of the losses, admitted to Congress that the bank failed in its oversight and took a multi-million-dollar pay cut.
Three employees in the London office were fired — two senior managers and a trader. The episode also led to the resignation of Ina Drew, the former chief investment officer overseeing JPMorgan's trading strategy.
Federal prosecutors in New York filed criminal charges last month against Javier Martin-Artajo and Julien Grout. Martin-Artajo supervised the bank's trading strategy in London, and Grout, his subordinate, was in charge of recording the value of the investments each day. They were charged with conspiracy to falsify books and records, commit wire fraud and falsify filings to the SEC. They also were charged separately in an SEC civil complaint.
Both traders, through their lawyers, have denied any wrongdoing.
Their colleague Bruno Iksil, a trader known as the "London Whale" for the outsize bets he made that could roil markets, had his name associated with the embarrassing loss. No charges were laid against him. Prosecutors say he tried to raise questions about how his colleagues were recording the trades.
A Senate subcommittee headed by Sen. Carl Levin, D-Mich., found in an investigation that senior JPMorgan executives made inaccurate statements about the loss that misinformed investors and the public.
Levin said Thursday the SEC could still determine who may have been responsible at higher levels of the bank.
Sen. John McCain of Arizona, the senior Republican on the subcommittee, sent White a letter asking her to hold individuals accountable for their role in the debacle. And Sen. Charles Grassley, R-Iowa, said "Maybe we'll see more enforcement action (from the SEC) on how the bank communicated with investors."
The SEC said its $200 million penalty is one of the largest in the agency's history. The money will go to a fund to compensate investors who were harmed by the bank's inaccurate financial reports concerning the trading loss, the SEC said.
The nearly $1 billion in penalties levied over the London trading loss was the biggest of several regulatory actions against the bank announced Thursday.
JPMorgan was also ordered to pay $80 million in fines and about $309 million in refunds for billing customers for identity theft protection they never received. The Comptroller of the Currency and the Consumer Financial Protection Bureau said about 2.1 million credit card customers were affected by the illegal practice.
The Comptroller of the Currency also cited JPMorgan for improper practices in its collection of credit card and other consumer debts, other than mortgages. The agency also said the bank failed to fully comply with a law capping military service members' interest on consumer loans at 6 percent a year.
JPMorgan promised to correct the problems in both those separate cases.
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