JPMorgan Chase braces itself for a big fine.
Businessweek news reports that in what’s shaping up to be a huge snag for regulators, the bank has agreed to pay upward of $750m to resolve U.S. and U.K. probes of its record $6.2bn London-whale trading loss, people with knowledge of the negotiations said.
Critically, the U.S. Securities and Exchange Commission and other regulators are on the verge of wresting an actual admission of wrongdoing from Morgan—in sharp contrast to the “neither admit nor deny” wording that most often accompanies such actions.
While $750m is a digestible fine for the hugely profitable multinational - a rare admission of wrongdoing may leave it vulnerable to private litigation.
A pair of former Morgan traders, Javier Martin-Artajo and Julien Grout, have been charged with five criminal counts in a federal indictment, including securities fraud, conspiracy, filing false books and records, wire fraud, and making false filings with the SEC.
The securities fraud charge carries a maximum term of 20 years in prison.
The agreement with the SEC, the Office of the Comptroller of the Currency, the Federal Reserve, and the U.K. Financial Conduct Authority could come as early as this week, reported the Wall Street Journal.
Morgan still faces action from the Commodity Futures Trading Commission for allegedly mispricing the derivative positions behind its disastrous London trades.
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