Updated from 9:46 a.m. ET with market reaction and comment from JPMorgan CEO James Dimon.
The bank entered into a consent order with the Federal Reserve and agreed to a $200 million civil penalty, which cited JPMorgan's failure "to appropriately inform its board of directors and the Federal Reserve of deficiencies in risk-management systems identified by management."
JPMorgan previously entered into a Federal Reserve cease-and-desist order in January, agreeing to remedy "unsafe and unsound practices" that led to the firm's "London Whale" hedge trading losses of at least $6.2 billion.Also on Thursday, the Office of the Comptroller of the Currency -- the prudential regulator for JPMorgan Chase Bank, NA, JPM's main bank subsidiary -- slapped the bank with $300 million in civil penalties, "for unsafe and unsound practices related to derivatives trading activities conducted on behalf of the bank by the Chief Investment Office (CIO)." The Securities and Exchange Commission fined JPMorgan Chase $200 million, according to the OCC's press release. The UK Financial Conduct Authority fined JPMorgan Chase Bank, NA roughly $220 million for "serious failings related to its Chief Investment Office (CIO)," saying in a statement that JPMorgan's conduct demonstrated flaws "permeating all levels of the firm: from portfolio level right up to senior management." Comptroller of the Currency Thomas Curry in a statement said the regulators' efforts represented "extraordinary work and international cooperation to help ensure our financial system operates in a safe and sound manner and in accordance with applicable laws domestically and abroad." Three days of leaks this week drove loads of media reports predicting the settlement, with totals as high as $900 million, which were slightly lower than the actual total announced. There have been plenty of additional leaks by federal authorities, including a Wall Street Journal report on Tuesday saying the Commodity Futures Trading Commission was conducting a separate investigation of the bank, and that the Department of Justice could still press criminal charges against the bank (not just against a few traders) overt the hedge trading debacle.
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