JPMorgan Chase will pay $920 million in penalties and admit wrongdoing over a $6 billion trading loss last year that tarnished the reputation of the largest bank in the United States.
Regulators said Thursday that the bank failed to properly supervise traders in its London operation, allowing them to assign inflated values to trades and cover up losses as they ballooned. Two former London-based traders are facing criminal charges of falsifying records to hide the losses.
The combined amount JPMorgan is paying the three U.S. regulators and the U.K. Financial Conduct Authority adds up to one of the largest fines ever levied against a financial institution.
The Securities and Exchange Commission fined the bank $200 million and required it to admit wrongdoing. The Federal Reserve Board imposed a $200 million penalty, while the Office of the Comptroller of the Currency set a $300 million fine. The British regulator fined the company $220 million.
New York-based JPMorgan called the settlements "a major step" in its efforts to put its legal problems behind it. The bank said it cooperated fully with all of the agencies' investigations and continues to cooperate with the U.S. Justice Department in its criminal prosecution of the two former traders.
"We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them," JPMorgan CEO Jamie Dimon said in a statement. "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 announcement came a few days after the five-year anniversary of the onset of the financial crisis.
The huge loss at JPMorgan raised concerns about continued risk-taking by Wall Street banks and questions of whether the financial industry had learned the lessons of the meltdown.
As part of the settlement, the SEC required a rare admission of wrongdoing on the part of JPMorgan, acknowledging that it violated the securities laws in failing to keep watch over the traders. That was a departure from the SEC's longstanding practice of allowing most companies and individuals agreeing to deals to neither admit nor deny wrongdoing.
The Associated Press