NEW YORK ( TheStreet) -- There's no end in sight for the continuing flow of regulatory leaks, expensive cash settlements and negative headlines for JPMorgan Chase (JPM - Get Report), according to CEO James Dimon.
In an interoffice memo leaked to news outlets Tuesday, Dimon warned of "more to come" in the "weeks and months" ahead, regarding "legal and regulatory issues facing our company." He also said the company was taking extraordinary measures to deal with those challenges, measures evidenced by plans to hire thousands of new workers.
Numerous reports have indicated JPMorgan was ready to pay fines of up to $700 million or $800 million to settle with the Department of Justice and federal bank regulators over misconduct related to the "London Whale" hedge trading losses last year. The Wall Street Journal on Tuesday reported that the Commodity Futures Trading Commission was also conducting a London Whale-related investigation.
According to the unnamed sources cited in the Journal report the CFTC is "focusing on a giant trading position that enforcement officials believe distorted prices and misled investors," during 2012.Despite the reported large settlement, JPMorgan -- the company, and not individual employees, some of whom have already been indicted over the London Whale fiasco -- is still facing possible criminal charges from the Justice Department. JPMorgan is facing $4 billion in expenses and fees related to the mounting regulatory challenges it faces. Meanwhile, two ex-JPMorgan traders were indicted for their role in the $6.2 billion trading loss known as the London "Whale." The indictments were unsealed in a Manhattan court Tuesday. The charge of securities fraud carries a maximum sentence of 20 years in prison. The indictment names Javier Martin-Artajo, who oversaw trading strategy for the synthetic portfolio at the bank's chief investment office in London, and Julien Grout, a trader who worked for him, in the indictment. According to media accounts of Tuesday's hearing, a lawyer for Grout accused the prosecution of being politically motivated and declared Grout's innocence. The defense argument is seeking to portray Grout as a lower-level employee merely following the instructions of his managers. -- Written by TheStreet staff in New York