JPMorgan told to fix oversight tied to $6B loss

Published on NewsOK Modified: January 14, 2013 at 7:56 pm •  Published: January 14, 2013
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In June, JPMorgan CEO Jamie Dimon acknowledged before congressional lawmakers that the bank made mistakes but he defended its strategy for managing risk.

Still, the bank took action against several employees at the heart of the controversy. Two senior managers and a trader linked to the London trading operation were fired. The bank took back nearly two years' compensation from them.

In addition to the firings, Ina Drew, the bank's chief investment officer overseeing its trading strategy, retired after 30 years at the bank and voluntarily repaid two years' salary.

The bank also made a broad reshuffle of its top management, in an apparent bid to restore investors' trust.

The second action announced Monday against JPMorgan was related to money laundering controls. The accord did not cite any specific case, but the agreement reached was similar to one Citibank struck with regulators in April.

The bank was cited for poorly monitoring potential money laundering at a time when a number of banks have been the spotlight for such abuse.

HSBC agreed last month to pay $1.9 billion — the largest penalty ever imposed on a bank — for lapses the Justice Department said enabled Mexican drug traffickers, Iran, Libya and others under U.S. sanction to move money around the world. And Standard Chartered Bank is paying $327 million to settle U.S. and New York City charges that it laundered money on behalf of four countries subject to U.S. sanctions: Iran, Sudan, Libya and Burma.

Money laundering takes profits from the trafficking of drugs or arms or other illicit activities and passes them through bank accounts or other legitimate businesses to disguise the illegal activity.

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AP Business Writer Christina Rexrode in New York and Associated Press writer Raphael Satter in London contributed to this report.