The Senate Permanent Subcommittee on Investigations issued a report Thursday that concluded JPMorgan Chase ignored mounting risk associated with the complex derivatives trades and took steps to mislead investors as losses mounted. The report accuses the Office of the Comptroller of the Currency of either failing to see warning signs or deliberately downplaying risks, The Hill reported.
The report stops short of accusing JPMorgan Chase Chief Executive Jamie Dimon or any other executives of violating the law and does not recommend new legislation, although it does recommend stronger oversight of derivatives trading, The Hill said.
A JPMorgan Chase spokesman said the company has "acknowledged mistakes" but said senior executives "acted in good faith and never had any intent to mislead anyone."
Subcommittee Chairman Carl Levin, D-Mich., said the investigation makes clear the U.S. financial system has "daunting vulnerabilities" and called for tougher implementation of the so-called Volcker rule, which limits some trading by banks.
Ranking member John McCain, R-Ariz., said the losses were the fault not only of JPMorgan Chase executives, but also federal regulators.
"They failed to notice or stop these reckless investments even though they had 65 regulators physically located at JPMorgan sites," McCain said.
The subcommittee is scheduled to hear testimony Friday from bank executives and regulators, The Hill said.