JPMorgan Chase & Co. (JPM:US) is in discussions with the U.K.’s financial regulator over the role London employees had in a $2 billion trading loss, according to two people familiar with the talks.
The Financial Services Authority is speaking with officials at the bank to determine the cause of the loss, said the people, who declined to be identified because they weren’t authorized to speak on the matter. The agency hasn’t opened a formal investigation and there was no evidence of criminal activity, according to the people.
The bank’s Chief Executive Officer Jamie Dimon said yesterday that the New York-based firm suffered the loss after an “egregious” failure in a unit involved in managing risks. The firm’s chief investment office took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter or next, Dimon said. He attributed it to “errors, sloppiness and bad judgment.”
The $2 billion loss occurred in London under multiple traders, according to an executive at the bank, who spoke on the condition of anonymity.
Spokesmen for the FSA and JPMorgan declined to immediately comment.
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