JPMorgan to pay $100M to settle charges on 'London Whale' trades

JPMorgan Chase & Co. has agreed to pay $100 million and admit that its traders acted recklessly, in order to settle one more set of charges in the U.S. over its so-called London Whale trade, the Commodity Futures Trading Commission (CFTC) announced Wednesday.

Last month, the bank paid $920 million to four other U.S. and British regulators to resolve civil probes of a $6.2 billion trading loss involving its chief investment office in London. 

The new CFTC case charges the bank with violating a prohibition on manipulative conduct when it traded in the credit default swaps — a type of financial contract originally created to insure against a company defaulting on its bonds — at issue. By selling a huge volume of swaps in a concentrated period, the bank's traders "recklessly disregarded" the precept that legitimate market forces should set prices, the CFTC said.

One Republican commissioner, Scott O'Malia, voted against the settlement and said he thought the CFTC should have further investigated whether JPMorgan engaged in a more serious act of price manipulation.

"I am concerned that in a rush to join in on a settlement brokered by other regulators, the Commission may be missing the opportunity to pursue allegations of greater wrongdoing," O'Malia said in a statement.

Explainer: How JPMorgan lost $2 billion

By charging the bank with "employing a manipulative device," the agency relied on new powers granted it by the 2010 Dodd-Frank financial regulatory overhaul.

The agency has been operating on a skeleton staff since the Oct. 1 government shutdown, and called some employees in on Wednesday on an "emergency basis" to announce the settlement, Commissioner Bart Chilton said on CNBC.

"We are pleased to be able to put behind us another aspect of the CIO (Chief Investment Office) trading matter by the resolution of the CFTC investigation," JPMorgan spokesman Joseph Evangelisti said.

Two former London-based traders are also facing criminal charges of falsifying records to hide the losses.

Al Jazeera and Reuters