JPMorgan Chase is apparently moving towards settling with the Securities and Exchange Commission over huge losses racked up by one of its traders known as the “London Whale.” JPMorgan is reportedly ready to admit wrongdoing over the ill-fated trades.
Bruno Iksil, a former derivatives trader, became known as the London Whale because of the scale of the bets he and his team were making, which cost JPMorgan Chase more than $6 billion. Besides the massive sum of money lost, the case is unusual because it has elicited a rare admission of wrongdoing from a bank.
“They usually neither admit nor deny culpability — they pay up and keep schtum,” says Marketplace’s Stephen Beard. “But that’s a bit difficult in this case, since the boss, Jamie Diamon, has already fessed up earlier in the summer. He said this: ‘Bad strategy, badly vetted, badly monitored, badly controlled, embarrassing, terrible — sorry.'”
JPMorgan’s decision to admit culpability might also have been influenced by Mary Jo White, the new head of the SEC, who has signaled that she will be taking a tougher line and seek public admissions of wrongdoing when the conduct is egregious.
As for the Whale himself, Iksil will not be fined or penalized for the time being. The FBI is continuing to investigate whether any criminal laws were broken.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.