Two former JPMorgan employees are suspected of misrepresenting a multi-billion-dollar trading loss last year while prosecutors in Manhattan are separately exploring ways to penalise the bank over the 'London Whale' trading blowup.
Prosecutors at the United States attorney’s office in Manhattan could also force the bank to bolster internal controls that failed to thwart the trading loss.
The action would come in addition to civil charges from the Securities and Exchange Commission, which could announce a settlement with the bank as soon as this fall.
The people briefed on the matter, who spoke on the condition of anonymity, cautioned that the investigation by the United States attorney’s office and the FBI in Manhattan was continuing and the bank was not in talks to settle that case.
Yet the case could gain momentum after prosecutors level criminal charges against the former employees. The charges, which could be announced as soon as this week, hinge on the suspicion that the employees masked the size of the trading losses as they spun out of control.
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image: © Martin Cathrae