U.K. and U.S. regulators are preparing to impose fines as soon as mid-September on JPMorgan Chase & Co. (JPM:US) after an investigation into the bank’s London trading losses last year, a person with direct knowledge of the matter said.
The U.K.’s Financial Conduct Authority and the U.S. Securities and Exchange Commission are in negotiations with the New York-based company to settle their probes, according to the person, who asked not to be identified because the talks aren’t public. In the U.S., the Commodity Futures Trading Commission and the Justice Department are also investigating events surrounding the losses.
JPMorgan, the biggest U.S. bank by assets, lost more than $6.2 billion last year on derivatives bets made by Bruno Iksil, a trader who was dubbed the London Whale because of the size of his positions. The U.S. last week charged Javier Martin-Artajo and Julien Grout, two of Iksil’s former colleagues, with wire fraud and conspiracy charges for allegedly seeking to hide losses. Iksil is cooperating with the U.S. in the case.
Spokesmen for JPMorgan, the SEC and the FCA declined to comment.
The SEC, which also sued Martin-Artajo and Grout last week, wrote in its complaint that JPMorgan “failed to furnish to the commission, in accordance with the rules and regulations prescribed by the commission, such financial reports as the commission has prescribed.” JPMorgan, which restated last year’s first-quarter earnings because of the losses, is expecting multiple fines from regulators investigating the losses, a person familiar with the matter said last week.
The Office of the Comptroller of the Currency, which censured JPMorgan without a fine earlier this year, may also take additional action against the bank or the traders, according to a person familiar with the matter. Bryan Hubbard, a spokesman for the OCC, declined to comment.
The Serious Fraud Office, which is in charge of most U.K. white-collar crime enforcement, is “liaising with our U.S. counterparts” and the FCA, Jina Roe, a spokeswoman, said in an e-mail this week.
The criminal cases are U.S. v. Grout, 13-MAG-01976, and U.S. v. Martin-Artajo, 13-MAG-01975, U.S. District Court, Southern District of New York (Manhattan). The SEC case is Securities and Exchange Commission v. Martin-Artajo, 13-cv-05677, U.S. District Court, Southern District of New York (Manhattan).
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