But more important than that relatively modest sum is the bank’s admission that its traders were 'recklessly aggressive'.
The new settlement brings to more than $1bn the penalties the bank has had to pay for the London whale and, with more cases to come, that figure could grow. The real news, though, is that after decades of allowing companies to 'neither admit nor deny' wrongdoing when settling cases, regulators are insisting that they admit guilt.
JPMorgan’s concessions in Wednesday’s CFTC case and last month’s Securities and Exchange Commission settlement signal that Wall Street firms no longer can flout the law and then, if caught, dismiss the resulting penalties as a cost of doing business. This is a sea change in U.S. law enforcement, one with far-reaching consequences.
A mea culpa in the CFTC case exposes JPMorgan to client and shareholder lawsuits for having built, then unloaded, huge trading positions that distorted the normal supply and demand signposts in the market.
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