The U.S. Securities and Exchange Commission, in settling claims with JPMorgan Chase over its handling of a $6.2bn trading loss, landed its biggest victory yet in fulfilling a pledge to force wrongdoers to admit guilt.
Bloomberg News reports that part of the $920m agreement with regulators in the U.S. and U.K., New York-based JPMorgan admitted Thursday that it violated federal securities laws when it failed to catch traders hiding losses in 2012.
'It’s no small thing to go from getting no admissions six months ago to this', said James Cox, a law professor at Duke University School of Law in Durham, North Carolina. 'It’s a useful shaming process. It has an impact on the behavior of other people'.
Under SEC Chairman Mary Jo White, 65, the enforcement division has shifted its long-standing policy of allowing defendants to settle matters without admitting or denying any wrongdoing. The practice had been thrown into question when U.S. District Judge Jed Rakoff rejected a settlement with Citigroup in part because the bank didn’t admit to any misconduct.
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