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JP Morgan accepts $100m fine over ‘London Whale’ incident



American investment bank JP Morgan has reached a deal with US regulatory body, the Commodities Futures Trading Commission (CFTC), over its part in the ‘London Whale’ debacle.

The deal was reported in the Wall Street Journal on Tuesday, with JP Morgan apparently accepting the incident had a “manipulative” effect on the credit derivatives markets.

The incident relates back to May 2012, in which French-born trader Bruno Iksil, the “London Whale”, generated initial losses of $2 billion through his derivative trading strategies.

JP Morgan was fined $920 million last month by UK and US regulators for covering up the extent of the losses caused, which is now estimated to be around $6.2 billion.

The CFTC did not participate in this settlement, but the announcement indicates the closure of the matter between regulators and the bank.

It is believed however, that the US attorney’s office in Manhattan is continuing to investigate individuals with regards to the incident.

Andre Spicer, professor of organisational behaviour at City University London, recently remarked that the fine, “reminds banks that they desperately need to change their ways or risk taking a huge hit not only their bottom line, but also their reputation.”

Official confirmation of the deal is anticipated later this week.

Further reading:

JP Morgan fined $920m by UK and US regulators over ‘London Whale’ cover up

Banking regulator fines RBS £5.6m for inaccurate transaction reporting

Oil trader fined £3m for manipulation by US and UK regulators

Barclays faces £50m fine for acting reckless in Qatar bailout