JCPMorgan has been hit with a $920 million fine a year after a group of company traders caused a multibillion-dollar loss.
In an unexpected move JPMorgan accepted the fines and admitted wrongdoing, thus resolving investigations from the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Federal Reserve and the Financial Conduct Authority in London.
Regulators claimed the bank had been deficient in “oversight of the risks” and assessment of controls and development of “internal financial reporting.”
Government authorities have placed most of the scrutiny in the bank's senior management claiming it failed to elevate concerns about the losses to the bank's board of executives.
“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,” George S. Canellos, co-director of the S.E.C.’s enforcement division, said in a statement.
The bank was also cited for failing to "keep watch over its traders" and overvaluing "a very complex portfolio to hide massive losses."
Although no specific executive was mentioned in the cases, Jamie Dimon, the bank’s chief executive, might end up taking most of the heat over the losses.
“We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them,” Dimon said in a statement. “Since these losses occurred, we have made numerous changes that have made us a stronger, smarter, better company.”
The $920 million fine comes a little over a month after the bank was ordered to pay $410 million to settle allegations it manipulated U.S. power markets.
“The settlements are a major step in the firm’s ongoing efforts to put these issues behind it,” JPMorgan said in a statement.