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JP Morgan has hit the headlines with UK and US fines totalling $920m in respect of the “unsafe and unsound” practices which lead to losses of $6.2b in trading in 2012. Speaking in respect of the “London Whale” trades the FCA’s director of enforcement and financial crime, Tracey McDermott, said “There were basic failings in the operation of fundamental controls over a high risk part of the business. Senior management failed to respond properly to warning signals that there were problems in the CIO.”
The SEC’s spokesman, George Canellos, commented along similar lines adding “While grappling with how to fix its internal control breakdowns, JP Morgan’s senior management broke a cardinal rule of corporate governance and deprived its board of critical information it needed to fully assess the company’s problems and determine whether accurate and reliable information was being disclosed to investors and regulators.”
The imposition of the fines is just one element of an ongoing investigation with the Commodity Futures trading commission looking at whether the bank is guilty of market manipulation and the US Justice Department considering criminal charges against some of the individual bank personnel.
JP Morgan have already made changes to their systems and in a statement this week its CEO, Jamie Dimon, said that the bank had learned from its mistakes adding “We will continue to strive towards being considered the best bank – across all measures – not only by our shareholders and customers, but also by our regulators.”