JPMorgan Chase is negotiating final terms of a deal with U.S. securities regulators to end a year long probe of derivatives bets that led to the bank’s biggest trading loss ever, two people briefed on the talks said.
Bloomberg News reports while JPMorgan is prepared to say it erred in how it oversaw a unit and London-based traders, executives aren’t likely to admit mistakes beyond what they already disclosed, one of the people said, requesting anonymity because the talks with the Securities and Exchange Commission aren’t public. How much the bank pays to settle is being debated, the people said.
JPMorgan, led by CEO Jamie Dimon, is seeking to resolve U.S. and U.K. probes after botched trades by its chief investment office fuelled more than $6.2bn of losses last year. Senate investigators concluded in March that the bank dodged regulators and misled investors amid souring bets by Bruno Iksil, a trader dubbed the London Whale because his positions were so big.
The company released a 129-page report in January that blamed managers, many of whom were reassigned or left last year, for roles in failing to halt the loss, as well as an “error-prone” risk-modelling system.
The SEC may accuse the firm of failing to enact proper controls, supervise workers, escalate concerns and share information internally, one of the people said.
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