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JPMorgan Chase to pay more than $700 million fine over trading losses

Sept. 16, 2013 at 6:15 PM   |   Comments

NEW YORK, Sept. 16 (UPI) -- Authorities are prepared to fine U.S. bank JPMorgan Chase more than $700 million in response to $6 billion in trading losses, sources told The New York Times.

Sources not authorized to speak in public on the deal said the fines would be levied by the Securities and Exchange Commission, the Comptroller of the Currency and other agencies to cover a breakdown in risk management that contributed to about $6 billion in trade bets the bank lost early in the year.

The losses were reported in May.

Bank directors are expected to conclude two days of meetings in New York on Tuesday. They are expected to approve the settlement and make an announcement about it sometime this week, the Times said.

Reportedly, however, the Commodities Futures Trading Commission, the agency that oversees the market in which the losses occurred, has been reluctant to sign on to the settlement.

In addition, the bank is likely to be fined by the Financial Conduct Authority, a British regulator, as the trades were made at the bank's London offices.

That would still not end the bank's difficulties with regulators. The Federal Housing Finance Agency has accused the bank of selling substandard mortgage securities to the Federal Home Loan Mortgage Corp., known as Freddie Mac, and the Federal National Mortgage Association, known as Fannie Mae.

It is also under investigation for its hiring practices in China. It is suspected the bank hired a large number of relatives of well-connected persons in China, essentially, using the jobs as bribery.

The bank is also in trouble for credit card abuses, which has resulted in an $80 million settlement with the office of the Comptroller and the Consumer Financial Protection Bureau, the Times reported.

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