Dimon said in a statement the bank accepted responsibility from the start, and is now a “stronger, smarter, better” company.
Iksil’s former boss, Javier Martin-Artajo, and junior trader Julien Grout were indicted Sept. 16 on five charges each, including securities fraud and conspiracy, for allegedly seeking to hide losses as they began to mount. Prosecutors have said Iksil, who wasn’t charged, is cooperating with them.
The OCC’s $300 million fine was the biggest levied against the bank today, followed by the FCA at 137.6 million pounds ($221 million). The Fed and SEC each fined JPMorgan $200 million.
Deficient Controls
“The trading losses occurred against a backdrop of woefully deficient accounting controls in the CIO, including spreadsheet miscalculations that caused large valuation errors and the use of subjective valuation techniques that made it easier for the traders to mismark the CIO portfolio,” the SEC said in its statement.
While the OCC and Fed censured JPMorgan this year and ordered it to strengthen internal controls, the agencies didn’t immediately assess fines.
Today’s settlements don’t close investigations of the trades by the Justice Department, CFTC and state attorneys general, people familiar with the matter said this week. The CFTC has been investigating whether the bank manipulated trading in credit derivatives while the U.S. Attorney’s Office in Manhattan, which is part of the Justice Department, is conducting a criminal probe.
“The settlement will not resolve the full extent of the bank’s liability and the consequences that could arise,” said Samuel Buell, a former prosecutor who now teaches law at Duke University Law School.
‘Open-Ended’ Cost
The cost for the bank is still “open-ended,” said Charles Peabody, an analyst at Portales Partners LLC in New York. Investors want some clarity on the seriousness of the criminal probe, he said. “I’m not sure that these settlements will conclude anything because you still have the CFTC, the DOJ and state AGs investigating.”