American and UK regulators have levied one of the largest fines on a single bank when it fined JPMorgan Chase $920 million this morning for the trading scandal perpetrated by Bruno Iksil, the trader known as the London Whale.
If the loss of an estimated $6 billion in the 2012 trading debacle were not enough, JPMorgan will now have to pay $300 million to the U.S. Office of the Comptroller of Currency, $200 million to the Fed, $200 million to the Securities & Exchange Commission (SEC) and 137.6 Sterling ($219.7 million) to the Financial Conduct Authority of the U.K.
This is no longer, as JPMorgan CEO Jamie Dimon once called it, “a tempest in a teapot.”
With this extraordinary fine, which adjusted for inflation may be the largest levied on Wall Street, also puts traders on notice. If they are fudging the books, trading erroneously or lying to their superiors who in turn will spread those lies to regulators, there are serious consequences.
The days of the laughably small fine from the SEC during previous administrations appear to be over. With this megafine that is just shy of $1 billion, the SEC and other regulatory bodies have done the unthinkable: they made the fine almost as large as the loss itself.
Traders, you have been warned.
