JPMorgan Ordered to Fix Controls, Pay Practices After Whale Bet
This article is for subscribers only.
JPMorgan Chase & Co. was ordered by U.S. regulators to strengthen risk controls and enhance executive compensation practices after losing more than $6.2 billion on a wrong-way derivatives bet last year.
The Federal Reserve found deficiencies in JPMorgan’s risk controls, loss modeling and audit functions as well as the process for alerting the board of directors to problems. The central bank and the Office of the Comptroller of the Currency both issued cease-and-desist orders yesterday requiring JPMorgan to tighten its trading oversight, particularly in the chief investment office, and separate orders to bolster systems preventing clients from laundering money.