JPMorgan told to fix oversight tied to $6 bn loss
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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.
U.S. federal regulators also on Monday cited the bank for lapses in oversight that could allow the bank to be used for money laundering.
JPMorgan, America'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. They said they had found "deficiencies'' in the bank's procedures for preventing money laundering, and also uncovered "unsafe or unsound practices'' regarding management of risk. The orders said the regulators and other government agencies could pursue further action.
Britain's Financial Services Authority, meanwhile, said in a statement Monday that its own investigation into JPMorgan's trading loss continues.
The U.S. regulators said that the bank has committed to take "all necessary and appropriate steps'' to correct the problems.
JPMorgan neither admitted nor denied the regulators' findings in agreeing to the accords.
"We've been working hard to fully remediate the issues'' related to risk management, JPMorgan spokesman Mark Kornblau said. He added that the bank has also made preventing money laundering a "top priority.''
In May, JPMorgan 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, hurt the bank's reputation.
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