U.S. demands JPMorgan pay $6 billion penalty
JPMorgan Chase & Co.'s headquarters in Manhattan
First it was the settlement of allegations it rigged electricity markets. Now, The Wall Street Journal says that JPMorgan Chase could pay $500-600 million in the case of the cover-up of huge trades gone bad carried out by the so-called "London Whale."
Meanwhile, The Financial Times is reporting that U.S. regulators are also pushing for JPMorgan to pay for allegedly misrepresenting the quality of loans it sold to government-backed mortgage companies ahead of the 2008 financial crisis. The bank is said be resistant to the settlement. Why? Perhaps because regulators are demanding JPMorgan pay a $6 billion -- yes, billion -- penalty.
"That's about a quarter of their net income," says David Beim, a finance professor Columbia's School of Business. "It's much larger than any other fines that they have paid. This is, by far, the largest case of the deluge of cases that have been flung at them -- they are really fighting off a lot of difficulties at the moment."