WASHINGTON JPMorgan Chase will pay $920 million in regulatory fines related to its London Whale trading scandal, adding to the $6 billion in losses the bank already took as a result of the trades.
The fines were assessed by the Federal Reserve Board, Office of the Comptroller of the Currency, Securities and Exchange Commission and the United Kingdom's Financial Conduct Authority, with each citing "unsafe and unsound practices" related to the bank's derivatives business.
The OCC, which assessed a $300 million civil money penalty, said that the bank "failed to identify and prevent certain credit derivatives trading" that resulted in massive losses to the institution. It also criticized JPMorgan for inadequate oversight and governance to protect the "to protect the bank from material risk."
"Banks are in the business of managing risk, and bank management must implement the appropriate governance, controls, risk management and audit functions to ensure the bank operates in a safe and sound manner," Comptroller Thomas Curry said in a press release. "Bank management must also ensure open and effective communication with supervisors, so that we can effectively do our jobs. Anything less is unacceptable and will not be tolerated."
Curry said the nearly $1 billion in fines combined with the losses should serve as "important reminders to all bankers of the importance of prudent controls, strong governance, and effective risk management."
The Fed and the SEC each assessed a $200 million penalty, while the U.K.'s FCA assessed a penalty of roughly $220 million. The Fed and SEC actions are against JPMorgan's holding company, while the OCC and FCA actions are against the bank.
In a statement, the bank said the settlements are a "major step" in the company's effort to "put these issues behind it."
"We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them," said Jamie Dimon, the chairman and CEO of JPMorgan. "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."
The bank said it has worked to improve its processes to ensure a similar trading losses cannot happen again.