JP Morgan fined $920m over scandal

US investment bank JP Morgan Chase has been fined US $920m (€688m) by regulators for “serious failings” over the London Whale trading scandal.

The high-risk trading scandal last year triggered $6.2bn (€4.6bn) of losses and sent shock waves through financial markets.

JP Morgan was handed a £137m (€102m) fine by the the UK’s Financial Conduct Authority (FCA) and penalties totalling $700m (€523m) by three American regulators, including the US Federal Reserve.

The FCA said JP Morgan’s “extremely serious failings” undermined confidence in UK markets.

Regulators said the bank had admitted wrongdoing for the scandal, which originated from its chief investment office in London.

It saw traders bet huge sums on complex financial instruments and cover up losses when trades went wrong and problems escalated.

Trader Bruno Iksil, who was dubbed the London Whale because of the size of his trades, has agreed to testify against his colleagues and is reported to have been granted immunity by American prosecutors.

The bank was criticised for a high-risk trading strategy, weak management, a poor response to the problems and failing to co-operate with regulators.

The FCA’s director of enforcement and financial crime Tracey McDermott said JP Morgan “failed to get a proper grip on the risks its business poses to the market”.

She said: “As things began to go wrong, the firm didn’t wake up quickly enough to the size and the scale of the problems.

“What is worse, they compounded this by failing to be open and co-operative with us as their regulator.”

The bank was also fined by the US Securities and Exchange Commission and the Office of the Comptroller of the Currency.

The FCA said its fine would have been as large if the bank had not agreed to settle at an early stage.