{"id":5417,"date":"2013-01-17T00:00:00","date_gmt":"2013-01-17T06:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2013\/01\/jpmorgan_chase_ordered_to_reme"},"modified":"2022-05-02T15:43:43","modified_gmt":"2022-05-02T20:43:43","slug":"jpmorgan-chase-ordered-to-reme","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/jpmorgan-chase-ordered-to-reme\/","title":{"rendered":"JPMorgan Chase Ordered to Remedy Risk Management Breakdowns Involving \u201cLondon Whale\u201d Trades"},"content":{"rendered":"

The Office of the Comptroller of the Currency and The Federal Reserve is ordering JPMorgan Chase (JPM) <\/a>to fix the breakdown that occurred in its risk management that resulted in the \u201cLondon Whale\u201d trades. These were outsized credit derivatives bets made by a group of traders in the UK that resulted in over $6 billion in losses for the investment bank. Due to the extremity of the some of the positions, prices in the markets became distorted. The \u201cLondon Whale\u201d is the nickname of one of the traders involved.<\/p>\n

According to the newly issued enforcement actions, the internal controls of the bank did not succeed in spotting and preventing specific trading involving credited derivatives that Chief Investment Office Ina Drew conducted and this led to the losses. The OCC says that per investigations that were conducted, there had been certain deficiencies, such as poor risk management procedures and processes, insufficient governance and oversight for proper material risk protection, inadequate control of trade valuation, models that were not properly developed or implemented, and insufficient internal audit processes. Meantime, the Fed pointed to deficiencies of senior management letting the board of directors know about certain issues.<\/p>\n

While JPMorgan Chase doesn\u2019t have to pay a fine, there are steps it is going to have to take to enhance its risk management and improve its anti-money laundering procedures. The OCC says that the financial firm\u2019s controls for anti-money laundering have key deficiencies related to the reporting of suspicious activity, the monitoring of transactions, risk assessment, customer due diligence, independent testing, and the proper placement of adequate internal control systems.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The Office of the Comptroller of the Currency and The Federal Reserve is ordering JPMorgan Chase (JPM) to fix the breakdown that occurred in its risk management that resulted in the \u201cLondon Whale\u201d trades. These were outsized credit derivatives bets made by a group of traders in the UK that resulted in over $6 billion […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3958],"tags":[],"class_list":["post-5417","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-jp-morgan-chase"],"yoast_head":"\nJPMorgan Chase Ordered to Remedy Risk Management Breakdowns Involving \u201cLondon Whale\u201d Trades — Investor Lawyers Blog — January 17, 2013<\/title>\n<meta name=\"description\" content=\"The Office of the Comptroller of the Currency and The Federal Reserve is ordering JPMorgan Chase (JPM) to fix the breakdown that occurred in its risk — January 17, 2013\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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