JPMorgan told to fix controls tied to $6 billion trading loss
BY Wire reports
Tuesday, January 15, 2013
1/15/13 at 4:09 AM
JPMorgan Chase & Co. has been ordered to take steps to correct poor risk management that led to a surprise trading loss last year of more than $6 billion.
Federal regulators also on Monday cited the bank for lapses in control that allowed the bank to be used for money laundering.
JPMorgan, the nation's largest bank by assets, will not pay a fine under the agreements with the Federal Reserve and the U.S. Comptroller of the Currency, a Treasury Department agency. The bank promised to strengthen its policies and procedures to control risk and to screen customers to prevent money laundering.
The regulators each issued two cease-and-desist orders against JPMorgan, a sanction that requires a bank to change its practices.
JPMorgan in May disclosed that its London office lost billions in trades designed to hedge against risk. The bank later said that some traders had tried to hide the size of the losses.
The loss, which occurred less than four years after the 2008 financial crisis, also hurt the New York-based bank's reputation. JPMorgan had survived the crisis by taking fewer risks than its competitors.